Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — OIL POLLUTION

Sir H. Roper: asked the Minister of Transport what recommendations he has received from the committee appointed to make inquiries concerning the prevention of pollution of the coast by oil; and what action he is taking on them.

Mr. Stokes: asked the Minister of Transport whether he has yet received the report of the committee appointed to examine the pollution of the beaches of Cornwall and other areas by oil and oil refuse; and whether he will make a statement.

The Minister of Transport (Mr. Alan Lennox-Boyd): The committee have not yet reported, and there is no statement that I can usefully make at present, except that they are going ahead vigorously with their inquiries.

Sir H. Roper: Would my right hon. Friend say how many nations have now subscribed to the international convention that will bring the matter on to the international plane?

Mr. Lennox-Boyd: I am not able to give an answer to that at this moment, but I believe that the mere fact that we are attacking this problem with present vigour may lead to a substantial increase in that number.

Mr. Stokes: It is all very well for the Minister to say this is being attacked with vigour. We have heard that before. Is he conscious that this started a long time ago, and can he give the House an assurance that we shall have something from him of a constructive nature before we go away at Easter?

Mr. Lennox-Boyd: I am fully conscious of the fact that this problem also existed under the late Administration. We are now doing our best to tackle it really successfully. We have got over all the preliminary stages of assembling information with the various companies and other bodies concerned and are now having weekly meetings in the Department to evolve practical suggestions. I have every hope that we shall have some practical suggestions to make before the summer.

Sir L. Ropner: Is my right hon. Friend aware that uninstructed opinion thinks of this as an easy matter with which to deal, whereas there are many technical difficulties to be overcome, and that it may well be that the committee will have some difficulty in reporting quite early?

Mr. Manuel: Is the Minister aware of the very large amount of money that has been expended by local authorities in coastal districts on the treatment of raw sewage, and that their efforts are being nullified in many areas by oil on the beaches, which makes them quite unsafe and unsuitable for bathing?

Mr. Lennox-Boyd: That is one of the reasons why we are having the inquiry.

Oral Answers to Questions — TRANSPORT

Driving Examiners (Guidance)

Mr. Dodds: asked the Minister of Transport what new instructions have been issued for the guidance of driving examiners resulting from the discussion between the Chairman of the Staff Side of the Departmental Whitley Council and the Principal Establishment Officer of the Ministry on the case of Mr. F. Wass, of Gainsborough, who was called upon to pass a driving test on his small motor mower; and under which Act the instructions were given for the test to take place.

The Parliamentary Secretary to the Ministry of Transport (Mr. Gurney Braithwaite): No such discussion has taken place, but arrangements are being made to inform applicants in circumstances such as those of Mr. Wass that they do not need to take a test.
The test for which Mr. Wass applied was conducted in accordance with the


Motor Vehicles (Driving Licences) Regulations, 1950, made under the Road Traffic Acts, 1930 to 1947.

Mr. Dodds: Is the Parliamentary Secretary aware that the answer he gave in December is greatly resented by the driving examiner and his colleagues? Is he not further aware that the General Secretary of the Society of Civil Servants has made a categorical statement that the Principal Establishment Officer of his Department has stated that the test was carried out in accordance with the law, and that Mr. Ainsworth would have been in trouble with his superiors if he had not carried it out? Why does the hon. Gentleman talk about an Act introduced by a Tory Government? Why did he say that this officer should have used his discretion and not carried out the test?

Mr. Braithwaite: On 15th December the hon. Gentleman and I were of one mind. He described this operation as "antics," and I said that it should be abandoned forthwith. I remain of the same opinion.

Mr. Dodds: Why does the hon. Gentleman pillory an officer who is carrying out his duty? Why do not he and his right hon. Friends get rid of this antiquated system?

Vehicles (Overtaking)

Sir H. Williams: asked the Minister of Transport whether his attention has been drawn to the fact that the practice of vehicles overtaking on the left-hand side is growing rapidly; and whether, in view of this, he will modify the Highway Code.

Mr. Braithwaite: Paragraph 29 of the Highway Code refers to this point, but I will certainly see if we can improve on it in the revision of the Code which is now taking place.

Sir H. Williams: Is it still illegal to overtake on the left-hand side, as distinct from what is said in the Highway Code, which is merely advisory?

Mr. Braithwaite: It is not illegal, but paragraph 29 of the Highway Code does say overtaking should be only on the right except when the driver in front has signalled that he is going to turn right; and the rule does not necessarily apply at roundabouts or on one-way roads.

Motor Vehicles (Suppressors)

Mr. Lewis: asked the Minister of Transport to amend the application form for the licensing of vehicles for purposes under the Road Traffic Acts to include a declaration that the vehicle for which a road licence is required is properly fitted with suppressors against interference with television reception.

Mr. Braithwaite: My right hon. Friend has already included in the form questions relating to the fitting and licensing of radio sets and I do not consider that it would be desirable to add further questions which are not essential for the purposes of the Vehicles (Excise) Act, 1949, and which have no bearing on revenue.

Mr. Lewis: Could the Minister therefore adopt the suggestion that on the form there might be a statement drawing the attention of the car owner to the advisability of having a suppressor for the benefit of television users?

Mr. Braithwaite: I will take note of that point.

Canal, Reading—Newbury Section

Mr. Mikardo: asked the Minister of Transport when he expects that the section of the Kennet and Avon Canal between Reading and Newbury will be open for traffic.

Mr. Braithwaite: I am not able to give a firm date for the opening of this section; the British Transport Commission inform me that recent investigations have shown that some of the locks need more extensive repairs than had been supposed. I will ask the Commission to keep the hon. Member informed of progress.

Mr. Mikardo: I thank the hon. Gentleman for that reply, but will he bear in mind that in May last he indicated to the hon. Member for Newbury (Mr. Hurd) that he would provide the facilities required by the Docks and Inland Waterways Executive for doing this work? Since then, the Executive have indicated that the work has virtually been abandoned? Will he be good enough to reiterate that it is his intention to see that the work is carried out within a reasonable time?

Mr. Braithwaite: Yes, Sir. I am rather surprised at the supplementary question,


because my information from the Docks and Inland Waterways Executive is that they propose to carry out certain important work during the next few months. It is hoped to re-open for navigation the section from Reading to Sulhampstead Lock, some 7½ miles in length, before the summer, so I think matters are going forward.

Lorries (Speed Limit)

Mr. Janner: asked the Minister of Transport whether his attention has been called to recent decisions in the courts that the speed limit is not applicable to lorries when empty; and whether he will deal with this point when taking steps to bring the present regulations with regard to the speed of goods vehicles up to date, in the light of developments during recent years in their design and construction.

Mr. Braithwaite: The implications of the decisions referred to are being carefully studied, but I am not yet in a position to make a statement on the matter.

Mr. Janner: Does the Minister agree that, if the decisions are correct, the position is a very anomalous one, and must be taken in hand fairly quickly; and will he see that attention is given to the matter as speedily as possible?

Mr. Braithwaite: That is a point which is being carefully studied.

B.T.C. Central Charges (Contributions)

Mr. Ernest Davies: asked the Minister of Transport (1) the estimate of the contribution that would be made by outside London passenger traffic towards the central charges of the British Transport Commission when he authorised increases in railway freight charges, as from 1st December, 1952; and by how much that contribution will be increased by the new charges scheme now proposed by the Commission;
(2) the estimate of the total contribution that would be made by London Transport and the railways within the London area to the central charges of the British Transport Commission when he authorised increases in the Commission's railway freight charges, as from 1st December last; and by how much that

will be increased by the new charges scheme now proposed by the Commission.

Mr. Lennox-Boyd: In authorising the increase of 5 per cent. in freight charges last month, I accepted the advice of the permanent members of the Transport Tribunal acting as a consultative committee. As they observed in their memorandum, which I circulated in the
OFFICIAL REPORT on 18th November last, it would have been improper for them to prejudge in any way any issue determinable by them as a Tribunal.
The contribution to be made by the various services towards the central charges of the British Transport Commission is one of the matters for discussion before the Tribunal at the forthcoming hearing, and I cannot anticipate their findings.

Mr. Davies: I regret that the Minister has been unable to give the figures which were asked for, as he was able to give such figures on 23rd June last year. On the basis of those figures would he not agree that, to ask London to make a contribution of £6 million more in increased fares and the rest of the country a contribution of only £500,000, indicates that the lack of balance between London and the outside areas has not only been maintained but worsened in increasing disproportionately the cost of travelling to the people of London?

Mr. Lennox-Boyd: I was able to give the figures last year because the Tribunal had then reported. After they have reported this year I have no doubt I shall be able to give the House some information as to the justice or otherwise of what the hon. Gentleman said. There was a long interchange in the House on this subject on 14th July last, when I made the Government's position specifically plain in the matter.

Mr. Beswick: Does the Minister mean that he only gets this information from the Tribunal and is not kept up to date direct by the Transport Commission?

Mr. Lennox-Boyd: The Commission repeatedly made plain to this Government and their predecessors the difficulty of allocating specific contributions from the various undertakings to central charges, but in response to requests from the Tribunal they offered to do their best to


furnish them with information. I do not intend, at this stage, to anticipate the findings of the Tribunal.

Mr. Davies: Up to the present London has been able to make a contribution to central charges but outside London receipts have not made any such contribution. Is it not the fact that in 1952 total increases in fares and charges for outside London have been approximately the same as inside London whereas, of course, the quantity of traffic carried outside London is greater? Has not the position therefore worsened for London?

Mr. Lennox-Boyd: That is essentially a matter on which the Tribunal can express a view.

Local Authority Vehicles (Levy)

Captain Pilkington: asked the Minister of Transport what proportion of local authorities' vehicles it is estimated will be exempted from the levy if the standard is raised from one to one and a half tons.

Mr. Lennox-Boyd: No statistics are available which would enable me to make such an estimate.

Captain Pilkington: Is my right hon. Friend aware that in the case of one local authority of which I know only three vehicles out of a fleet of 50 are concerned, and would he consider some way of lessening the burdens that fall on local authorities in this matter?

Mr. Lennox-Boyd: As I have said, it is impossible to know how many vehicles are affected unless they happen to coincide with definite taxation classes. We believe that by raising the limit to 30 cwt. instead of one ton the original purpose of the relevant Clause of the Bill will be achieved, and, also, that there will be substantial aid for certain local authorities.

Mr. Lewis: Is the Minister aware that in the case of my own local authority it will only apply to one vehicle and that the appropriate association of local authorities are still very much upset about this affair? Is it not disgusting that they should have to pay this levy, and will he not look again at this matter?

Mr. Callaghan: Is not the real way of getting rid of the burden on local authorities to get rid of the levy altogether, and to sell the assets at their proper price instead of selling them off cheaply?

Passenger Fare Increases

Lieut.-Colonel Lipton: asked the Minister of Transport on how many occasions since 1945 passenger fares have been increased in the London area; the average percentage increase in each case; and to what extent corresponding increases have been made outside London.

Mr. Lennox-Boyd: As the answer is long and contains a number of figures I will, with permission, circulate it in the OFFICIAL REPORT.

Lieut.-Colonel Lipton: While regretting that the answer is so long that it has to be circulated, may I ask whether these figures confirm the widespread view that London is being unfairly penalised compared with the rest of the country? If so, how long is the victimisation of London traffic to continue?

Mr. Lennox-Boyd: The answer to the first part of that question is No.

Following is the answer:
Since 1945, passenger fares on London Transport rail and road services have been increased four times, and on Railway Executive lines three times. In 1945, fares on London Transport were greater than pre-war by about 10 per cent. overall. On main lines inside and outside the London area, the increase on standard fares was 16⅔ per cent. for ordinary fares and 10 per cent. for workmen's and season tickets, but the effective increase overall was substantially greater because of the cessation of cheap fare facilities during the war. Increases made in 1947 brought London Transport rail and road fares to about 31 per cent. over pre-war and main line standard fares, inside and outside London, to 55 per cent. over pre-war.
The London Area Passenger Charges Scheme came into force on 1st October, 1950, and the net effect of the increases and decreases was to raise fares in the London area (which includes the London lines of British Railways) to about 54 per cent. above pre-war, but the fares outside London were not affected. The new bases of fares resulting from the 1952 Passenger Charges Scheme raised the level of fares in the London area to about 83 per cent. overall compared with pre-war. The level for British Railways outside London was increased from about 78 per cent. to nearly 90 per cent. over pre-war.
Bus, tram and trolley-bus fares have been generally raised throughout the country since


the war, but no statistics showing the number of separate increases or of the average percentage increases made are readily available in my Department.

Mr. Beswick: asked the Minister of Transport when giving a directive, or otherwise, requesting the London Transport Executive to revise their proposed fare increases in 1952, what was his definition of hardship which the revised increases were to be designed to prevent.

Mr. Lennox-Boyd: Hardship was used in its ordinary sense as defined in the Oxford English Dictionary:
The quality of being hard to bear, or, a condition which presses unusually hard upon one who has to endure it.
The Government intervention was directed to securing that in general the increases in sub-standard and concession fares were not proportionately greater than the increases in ordinary fares.

Mr. Beswick: But this admirable definition applies equally to this other increase as to the new increases now proposed. Will the Minister say why he cannot apply that same definition to this proposed increase and ask the London Passenger Executive to think again?

Mr. Lennox-Boyd: I think the hon. Gentleman has that down as his next Question.

Mr. Beswick: asked the Minister of Transport if he will direct the British Transport Commission, before the London Transport Executive operate any new fare increases, to observe in 1953 the same requirement which they were to observe in 1952 of preventing hardship.

Mr. Lennox-Boyd: I think we had better await the outcome of the inquiry now being conducted by the Transport Tribunal.

Mr. Beswick: That is not good enough, because the last inquiry by the Tribunal was overruled by the present Government. They did not take any notice of the Tribunal. They applied the test of hardship, and I am now asking the Minister to apply the same test for this fresh increase. I want to know why he will not apply that test of hardship now?

Mr. Lennox-Boyd: The intervention on the last occasion by the Government —if I may call it so—was due to the use

by the Commission of the discretion that had been left to them by the Tribunal. I think we had better wait and see whether this time any discretion is left.

Mr. E. Fletcher: Will the right hon. Gentleman ask the Prime Minister, when he returns, to keep his eye on this matter in order that there may be no further injustice to the travelling public of London?

Sir H. Williams: Will my right hon. Friend inquire why privately-owned omnibus companies have raised their fares less than the publicly-owned omnibus companies?

Lieut.-Colonel Lipton: Can the Minister give an assurance that if he is dissatisfied with the findings of the Tribunal following the forthcoming inquiry he will reserve to himself the right of overriding them as he did on the previous occasion?

Mr. Lennox-Boyd: That is quite hypothetical.

Oral Answers to Questions — ROADS

Traffic Arrangements, Morden

Captain Ryder: asked the Minister of Transport what reports he has received on the new traffic arrangements outside the Morden Underground Station; and if he will now make a statement.

Mr. Braithwaite: The new arrangements came into force last October. So far they seem to have reduced accidents, but they are still being watched and it is too early to come to a final conclusion as to their efficiency.

Captain Ryder: While thanking my hon. Friend for his effective interest in this very congested area, may I ask him whether his Department will continue to keep a very careful watch on this question?

Mr. Braithwaite: As my hon. and gallant Friend may be aware, a meeting took place on 8th January between representatives of the local authority, the Commissioner of Police, the London Transport Executive and this Department, when the general feeling was that the new arrangements have proved beneficial, though certain modifications of bus stops


and adjustments of signals were desirable to increase efficiency and safety, and the matter is subject to a careful watch.

Car Parking, Central London

Mr. Russell: asked the Minister of Transport if he has now received a further report from the London and Home Counties Traffic Advisory Committee on traffic congestion in Central London; and if he will make a statement.

Mr. Lennox-Boyd: I have recently received a report on car parking in Central London from a working party appointed to follow up the Advisory Committee's recommendations on that subject in their report of 1951. This report will be published soon, and I should like to take this opportunity of thanking and congratulating the authors for all the work they have put into it.

Mr. Russell: Can my right hon. Friend give us any idea what the report will contain?

Mr. Lennox-Boyd: The broad purpose of the report is the building of underground garages in certain selected London squares to be financed out of machines in nearby parking streets on the American principle. I think there is a great deal of value in this report. I have myself read it with the greatest interest, and I told Mr. Samuels, the Chairman, on the day he presented it that I felt sure the public also, on the understanding that we must move forward, would welcome it.

Mr. Ernest Davies: When the report is published, will the Minister convey to the House the views of the Government and, at the same time, what action he proposes to take on the report?

Mr. Lennox-Boyd: Certainly. I am not in any way anxious that the Government should not take a lead in this matter, but this is one of those things in which public opinion must first be educated, and I propose to start by educating my colleagues in the House and shortly to put certain designs in the Tea Room.

Accidents, Bramham

Sir L. Ropner: asked the Minister of Transport whether he is aware that, owing to the slippery state of the road, there have been a number of accidents in Bramham; that this matter was brought

to the attention of the divisional road engineer in October; and whether he will now take steps to ensure that the road through Bramham is roughened without further delay.

Mr. Braithwaite: Two accidents have been reported here during the last two years. The road will be resurfaced next summer, and in the meantime gritting is carried out when weather conditions require it.

Sir L. Ropner: Is my hon. Friend aware that there appears to have been some hesitancy on the part of this divisional road engineer in dealing with this problem, which is more urgent than he appears to think, and that there have been four accidents on this stretch of road; and will he give me an assurance that an instruction will be issued to the divisional road engineer to give the matter his urgent attention?

Mr. Braithwaite: This is being dealt with this summer. The question of priority is always difficult, and there are a number of spots where accidents are even more frequent than here.

Sir L. Ropner: Is my hon. Friend not aware that this is urgent in the winter months of the year, and will he give me an assurance that he will issue instructions that this portion of the road at least will be gritted during the next three or four months?

Mr. Braithwaite: In my original answer I said that gritting is carried out when required.

Mr. Mikardo: Has the Parliamentary Secretary given any consideration to the German practice of having a warning sign at the beginning of a section of the road which is likely to be slippery in wet weather?

Mr. Braithwaite: That is another question.

Aircraft Landings (Control)

Brigadier Medlicott: asked the Minister of Transport if his attention has been drawn to the increased risk of accidents resulting from aircraft taking off and landing in the immediate vicinity of main roads; and, in view of the continued increase in the volume of air and road traffic, what steps are being taken to speed up the installation on and near to busy


airports of warning lights directed both to the pilots of aircraft and to the drivers of road vehicles.

Mr. Lennox-Boyd: My right hon. Friend the Secretary of State for Air and I are well aware of this problem. Experiments with light signals to control road traffic have already been made at military and civil airfields and others are now being prepared. I am not yet satisfied, however, that this method of control is as safe as others, such as barriers and pickets, which are in use at present where they are considered necessary.
In general, the control of aircraft is most effectively exercised by radio, which is in constant use at airfield traffic control centres. In addition, airfields in use for flying at night are already provided with approach lighting. By day, lighting would be ineffective.

Mr. Beswick: Is the Minister not aware that this problem is not simply a matter of preventing an actual collision between an aircraft and a motor car, but that it arises principally because motorists tend to drive slowly or to stop altogether to watch aircraft? Will he see what can be done to keep traffic moving along these stretches of road?

Mr. Lennox-Boyd: I am quite conscious of that.

Mr. Callaghan: Has the right hon. Gentleman consulted the Minister of Civil Aviation on this matter?

Mr. Lennox-Boyd: Yes, and I had an excellent report.

Traffic Congestion, London

Captain Ryder: asked the Minister of Transport what measures are being taken to improve the traffic conditions in the London area by means of circular roads, increased car parking facilities and road widening, &c.; and the annual expenditure on these improvements.

Mr. Braithwaite: In present economic conditions road improvement schemes have had to be confined to accident spots. About 50 such schemes have been authorised in the London County Council area, eight being for road widenings and the rest mainly for refuges. The estimated cost of these is £93,000, most of which will be spent this year.
The car parking problem is being specially studied in the light of the report referred to in my right hon. Friend's answer of today to my hon. Friend the Member for Wembley, South (Mr. Russell).

Captain Ryder: In view of the ever-increasing cost of transport in the London area and the economic effects this has had, will my hon. Friend bear in mind the great importance of trying to reduce this traffic congestion? Does he not think that the sum of £93,000, which he has just mentioned, is very small compared with the fact that, quite apart from the sum paid in respect of private vehicles, the London Transport Executive alone is paying some £6,000,000 in taxation, and that a far greater effort should be made in this direction?

Mr. Braithwaite: My right hon. Friend discussed many of these problems informally on Friday last with the London and Home Counties Traffic Advisory Committee. I am sure that my hon. and gallant Friend will be glad to learn that the experimental unilateral waiting scheme commences tomorrow.

Mr. Noel-Baker: Was it not determined by the London police, many years ago, that the annual cost of traffic congestion in London amounts to many million pounds a year, and is not an allocation of £93,000 really derisory in view of the problem?

Mr. Braithwaite: Our predecessors were equally derisory in this respect.

Lossiemouth—Hopeman

Mr. Spence: asked the Minister of Transport (1) if he will refuse permission, on grounds of loss of amenity, for the building of a new road between Lossiemouth and Hopeman, passing to the north of Lossiemouth Aerodrome and, in part, going through the Moray Golf Course; and the estimated cost of building this road;
(2) what organisations or individuals have lodged objections to the official proposal to build a new road between Lossiemouth and Hopeman, passing to the north of Lossiemouth Aerodrome and, in part, going through the Moray Golf Course; whether a public inquiry is to be held; and on what date.

Mr. Braithwaite: Objections to the construction of this road have been lodged by the Lossiemouth and Branderburgh Town Council, the Moray Golf Club, the Scottish Tourist Board, the National Farmers' Union of Scotland, and 19 farmers and tenants of agricultural land in the Parishes of Drainie and Duffus.
A public inquiry is to be held at Lossiemouth on 2nd February to consider these objections. I cannot anticipate the decision my right hon. Friend may reach after considering the inspector's report. The estimated cost of building the road is about £45,000.

Mr. Spence: Would my right hon. Friend agree that to drive a road through and break up parts of this golf course would only be justified on grounds of supreme importance, such as national security? Could he give an assurance that at the inquiry to be held at Lossiemouth representatives of his Department and of other Ministries will be present, charged with the duty of answering questions and giving evidence, so that the inquiry may be as useful as possible?

Mr. Braithwaite: The reply to the second part of the supplementary question is, of course, in the affirmative. As regards the first part, I cannot obviously, discuss the merits or demerits of the scheme pending the inquiry.

Mr. Woodburn: Can the hon. Gentleman say how this priority was decided? From my knowledge of Scotland, I can think of a large number of places where, both from the point of view of safety and economic necessity, there is a much greater need for a road than on this particular stretch of the Moray coast. Can he say what were the grounds of priority for this scheme, when there is so great a scarcity of roads elsewhere?

Mr. Braithwaite: All this was most carefully examined. Priorities are a matter of great complexity, and it has been my invariable experience that any road which we choose for improvement is immediately described as unnecessary by right hon. and hon. Members who sit for other parts of Scotland.

Mr. Hector Hughes: Instead of making this road would the Minister consider putting roads across the Tay and the Forth, where they are badly needed?

Mr. Braithwaite: The question of finance is somewhat difficult.

Icy Roads (Gritting)

Mr. Janner: asked the Minister of Transport whether he is aware that, on several occasions during the current winter, highway authorities have not commenced to apply grit to icy roads or to remove snow until 9 or 10 a.m. following a fall of snow or icing conditions during the previous night; and whether, in view of the delay thus caused to essential road transport, he will take steps to ensure that remedial action is taken by highway authorities at an earlier hour.

Mr. Braithwaite: I am well aware of the need to deal with snow and ice at the earliest moment, and I think that, on the whole, highway authorities take all practicable steps to this end. The question is under constant review between the authorities and this Department. Delays are sometimes unavoidable because resources are not unlimited.

Mr. Janner: Is the Minister aware that that is not an altogether satisfactory reply? Will he direct his attention to the fact that these incidents have occurred and to the desirability of their not recurring and give instruction accordingly?

Mr. Braithwaite: Yes, Sir. We have been active in the matter. Arrangements have been made with the Meteorological Office to give early warning to local authorities of snow or icing conditions, and arrangements for supplying additional labour have been made with the Ministry of Labour, the War Office, the R.A.F. and the Air Ministry Works Directorate. My right hon. Friend maintains a number of snow ploughs at suitable places throughout the country to be made available as needed.

Mr. Lewis: Is the Minister aware that the City of London Corporation have a magnificent method of clearing their streets within a matter of a few hours? Surely what they can do other boroughs could do.

Mr. Braithwaite: Perhaps the hon. Member will convey to his hon. Friend the Member for Leicester, North-West (Mr. Janner) the excellent record of this Conservative local authority.

Viscount Hinchingbrooke: Is my hon. Friend aware that no other country in the world sands and grits its roads as early as we do?

Neath—Llanelly

Mr. Callaghan: asked the Minister of Transport when he expects work on the Neath—Llanelly road to start; how many men will be employed when work is at its maximum; and how long the work will last.

Mr. Braithwaite: I hope that some of the work will start this year. Several improvements are involved and the whole work is unlikely to be completed for six years or so. At the peak some 120 men are likely to be employed.

Mr. Callaghan: As the redundancy in that area to which the Minister referred amounts to 5,000, has the Minister any other such plans for additional road works that will absorb some of the other men who are being thrown out of work?

Mr. Braithwaite: My right hon. and learned Friend the Secretary of State for the Home Department and Minister for Welsh Affairs made it clear recently that this scheme was undertaken to improve communications and trade between Wales, the Midlands and London.

Mr. Callaghan: Is the Minister not aware that this scheme was put forward not from that point of view at all, but with a view to absorbing the redundant tinplate workers, and can he tell us whether any plans have been considered for other schemes to absorb some of the redundant workers?

Mr. Braithwaite: All schemes are promoted with that idea in view as well, but the Question relates to the Neath-Llanelly road and that is the one I have answered.

Oral Answers to Questions — RAILWAYS

Automatic Train Control

Mr. Nabarro: asked the Minister of Transport (1) what arrangements are in hand for the extension and standardisation of automatic train control and signalling on British Railways with a view to avoiding further collisions and accidents;
(2) whether he will now make a statement upon the causes of the Harrow train disaster in October, 1952; and what is the final casualty roll.

Mr. Lennox-Boyd: I am awaiting the report of the Chief Inspecting Officer of Railways on the recent accident at Harrow. Until it is published I am unable to amplify the statement which he made in public on 16th October, 1952, that the accident was due primarily to the Perth express having passed two signals at danger. The final casualties, I regret to say, were 112 persons killed, 66 seriously injured and 274 slightly injured.
As I informed the House on 27th October last, in reply to a Question by my hon. Friend the Member for Truro (Mr. G. Wilson), the British Transport Commission are giving urgent consideration, in the light of experiments which have been going on for some time, to the initiation of a practical programme for the extension of automatic train control on British Railways. This question also will be fully reviewed in the Chief Inspecting Officer's report, and I cannot say anything further at this stage.

Mr. Nabarro: Would my right hon. Friend not agree that this further consideration of automatic train control and signalling has now been going on since 1947, and that, in the meantime, we have had a number of very serious accidents? Would he bear in mind that only a very small number of the 19,000 steam locomotives in use on British railways are fitted with automatic equipment; and does not the matter call for much more urgent action than has been taken in the course of the last two or three years?

Mr. Lennox-Boyd: I am glad to say that I hope that by the end of the month about 50 engines will be fitted with improved magnetic type apparatus, and will be tried as a production type on the Barnet-Huntingdon line. I do not want the public to think that this is bound to lead almost overnight to the fitting of all engines with this apparatus. There must be long and exhaustive inquiries into the production model, but this is the first step and I hope that it will be very fruitful.

Mr. Sparks: When the right hon. Gentleman says that this will have to be a long process, is he aware that more than 40 years ago the former Great Western Railway introduced their system which has proved to be the most effective of any? Why is it that more than 40 years have elapsed before any of the railway companies, and now the


British Transport Commission, have introduced the system which has proved so effective on the Great Western Railway? Is the right hon. Gentleman also aware that it is practically impossible to devise a system which is 100 per cent. perfect in all circumstances, and would it not be far better to proceed with a system which has proved itself, and which gives the maximum degree of safety?

Mr. Lennox-Boyd: Perhaps the hon. Gentleman would agree, then, that it is a pity the identity of the Great Western Railway was dissolved. I am anxious that people should realise that there must be experiments. I do not mean experiments running into years, but with these production types there will probably have to be some six months or so of hard investigation as to how far they are proving effective. I am very hopeful that after that we shall be in the realm of definite achievement.

Mr. Callaghan: Is it not clear that, had it not been for the dissolution of the Great Western Railway and the formation of the Railway Executive, with powers over all the companies, the inter-company jealousy which has prevented the adoption of the system during the last 40 years would never have been got rid of?

Mr. G. Wilson: Can my right hon. Friend say what progress has been made with the experimental use of radar equipment on railway engines as an additional standard safety precaution?

Mr. Lennox-Boyd: I think that this and other matters had better await the report of the Chief Inspecting Officer.

Locomotives (Maintenance)

Mr. Nabarro: asked the Minister of Transport which railway accidents occurring in 1951–52 were adjudged by the inspecting officers of his Department to be attributable to faulty or negligent maintenance of steam locomotives; and what total numbers of fatal or other casualties resulted from such accidents, including the Blea Moor disaster.

Mr. Lennox-Boyd: In 1951, 13 accidents were reported which were adjudged to be caused by faulty or negligent maintenance of steam locomotives. These

included the accidents at Weedon, in which there were 15 deaths and 36 injuries, and at Queen Street, Glasgow, in which seven persons were injured. In the remaining 11 cases three persons were injured.
The final figures for 1952 are not yet available, but the latest returns give 13 such accidents, in which there were 49 instances of injury and no fatalities. These included the derailment at Blea Moor, in which 36 persons were injured, and the accident at Crewkerne, in which there were eight injuries.

Mr. Nabarro: Is it not a fact that the present standards of uncleanliness of British Railways locomotives, demonstrating a good deal of slovenliness in maintenance, are primarily the cause of these accidents? Does not my right hon. Friend recall that, in pre-war days, steam locomotives were gleaming and clean, whereas today they generally resemble travelling soot bags? Until this matter is gone into and standards of morale are improved is it not impossible to prevent further accidents on account of maintenance?

Mr. Lennox-Boyd: I think that it would be a good thing if everything on the railways and elsewhere were a little smarter, but I am anxious to make sure that people realise that although there are certain places, as shown in the Inspecting Officer's Report, where these accidents were due to negligence, there is no general cause for alarm about the conditions of locomotives generally in our country.

Mr. Ernest Davies: Is not a more reasonable explanation of the difficulties which have arisen the fact that the locomotives are old and should be put out of commission, and that as a consequence of the starvation of the railways of capital investment it has not been possible to replace them?

Mr. Lennox-Boyd: That certainly plays its part.

Mr. G. Wilson: Can my right hon. Friend say whether the altered regulations as to the reporting by drivers of defects of railway engines are an improvement on the regulations that existed under the old railway system or not? Has he considered whether the variations are an improvement or the reverse?

Mr. Lennox-Boyd: There was an alteration in the basis of calculation in 1949, and I will discuss that point with the Chief Inspecting Officer.

Oral Answers to Questions — MINISTRY OF SUPPLY

Gannet Aircraft (Production)

Mr. Langford-Holt: asked the Minister of Supply what has been the effect on production of the Gannet aircraft of the complete change of its design; and what stages of production had been reached when this change was decided on.

The Minister of Supply (Mr. Duncan Sandys): It is difficult to assess precisely the extent of the delay caused by the changes made in the operational requirement and design of the Gannet aircraft; but it was certainly very considerable. The most radical of these changes, necessitating the construction of a new prototype, was decided upon between 1948 and 1950, before the production order was placed.

Mr. Langford-Holt: Is my right hon. Friend aware that this is not the first type of aircraft to be affected in this way? Will he consider seriously adopting a new system which can enable aircraft to be put more quickly in service than they are at present? They are taking a great many years, as the hon. Member for Cardiff, South-East (Mr. Callaghan) knew when he was in office, before my right hon. Friend.

Mr. Sandys: This is a matter which we have constantly in mind. There have been particularly disappointing results in the case of one or two naval aircraft, and I am examining the matter with my right hon. Friend the First Lord of the Admiralty.

Mr. Woodburn: Is the hon. Gentleman aware that it is simply futile to produce aircraft which are already obsolete because a new idea has come along in the midst of their creation, that it is absolutely necessary that these changes should take place before anything is put into production, and that we should not waste money upon producing something which is out of date before it goes into production?

Mr. Sandys: I do not think anybody could disagree with the principles enunciated by the right hon. Gentleman.

Ordnance Factory Inspectors (Committee)

Mr. Swingler: asked the Minister of Supply the results of his inquiry into the numbers and duplication of inspectors in Royal Ordnance factories.

Mr. Sandys: In accordance with the recommendation of the Select Committee on Estimates, my right hon. Friend the First Lord of the Admiralty and I have set up a committee to report upon this problem. Mr. Hugh Rogers, who is a Director of the Imperial Tobacco Company and was, during the war, Deputy-Controller (Production) at the Admiralty, has kindly accepted our invitation to be chairman of this committee.

Atomic Energy (Industrial Use)

Mr. Hector Hughes: asked the Minister of Supply what progress has been made in British national research stations towards solving the problem of using atomic energy for industries, for travel and for other peaceful development purposes, and when this form of energy is likely to be available for such purposes.

Mr. Sandys: Since the reply is somewhat lengthy I will, with your permission, Mr. Speaker, answer it at the end of Questions.

Atomic Energy (Workers' Protection)

Mr. Hector Hughes: asked the Minister of Supply how far investigations in British national research stations have yet determined whether atomic energy can be used for industrial purposes without harmful effects upon the people who use it, or work in it or with it for those purposes.

Mr. Sandys: Our investigations up to date indicate that provided appropriate safety techniques are applied and health instructions are observed, the use of atomic energy for industrial purposes should have no harmful effects upon the workers engaged.

Mr. Hughes: Without going into unnecessary details can the Minister say


what these protective techniques are? Can he give an outline of what they will be?

Mr. Sandys: Not without going into very great detail.

Building Company, Stepney (Stainless Steel)

Mr. W. J. Edwards: asked the Minister of Supply (1)if he is aware that the application made by the Banco Building Co. Ltd., Stepney Green, London, E.1, for a licence to obtain stainless steel was referred by his department to the National Association of Shop-fitters for them to make inquiries, in the course of which they forwarded an application form for membership of the association to the applicants for the licence; and if this practice has his approval;
(2)if he is aware that the practice of referring applications for licences to obtain material to the National Association of Shopfitters is unfair to those firms which are not members of the association; and if he will give instructions that this practice is to cease;
(3)when the Banco Building Co. Ltd., London, E.1, may expect a decision on the application made by them last February for a licence to obtain stainless steel.

Mr. Sandys: I assume that the hon. Member is referring to Barco (Shop-fitters) Ltd. A licence was issued to the firm on 5th December to use stainless steel for shop fittings. From the time that the Nickel (Prohibited Uses) Order was made in June, 1951, it was the practice to consult the National Association of Shopfitters about cases of this kind and I am satisfied that the advice given has always been completely impartial. I recognise, however, that this procedure is liable to cause apprehension on the part of firms who are not members of the Association. I have, therefore, given instructions that the procedure should cease.

Mr. Edwards: While I thank the right hon. Gentleman for his reply, may I ask if he is aware that the licence was not issued until after I had put the Question on the Order Book, that the application for this licence was made in February last and that it was because

of the delay as the result of submitting the application to the National Association of Shopfitters and his own Department that this firm was possibly going into liquidation? They were unable to accept orders since they made the application for the licence in February last. I thank him for the fact that he has appreciated that this practice is a wrong one and I ask him to see that in no circumstances firms outside the National Association of Shopfitters will be penalised in this way because of the procedure in his Department.

Mr. Sandys: I could not, in answer to a supplementary question, go into all the details of what happened, but I have here a long list of particulars of the correspondence which took place. It is not nearly so simple a matter as the hon. Gentleman suggests.

Surplus Vehicles (Disposal)

Sir H. Williams: asked the Minister of Supply if he will make a statement on the disposal of surplus vehicles to Ernest Reid and Company, Ltd., a company now in compulsory liquidation.

Mr. Sandys: In 1948 an inquiry was held, in collaboration with the police, into the circumstances in which surplus vehicles were disposed of to Ernest Reid & Co., Ltd. No evidence of irregularities was disclosed.

Sir H. Williams: Has my right hon. Friend had his attention drawn to articles in the "People" newspaper alleging that a named civil servant accepted bribes to the extent of £160,000, and if those allegations have not been followed by a writ for libel will my right hon. Friend look into the matter further?

Mr. Sandys: I have seen the article, and from memory I rather think that the civil servant in question is dead. What I would say is that the whole case was referred at the time to the Director of Public Prosecutions, who advised that the evidence available would not support a charge against any of the people concerned.

Mr. G. R. Strauss: Does not the right hon. Gentleman condemn in the strongest possible way sensational stories of this sort appearing in the Press alleging all sorts of corrupt practices for which there is apparently no justification? Is it not


wholly contrary to the public interest and to the standards and reputation of our Civil Service?

Mr. Sandys: I am glad that the right hon. Gentleman has made that point. I entirely agree. It is one of the points we can agree upon.

Sir H. Williams: Is my right hon. Friend not aware that the owners of this newspaper are the same people who own the "Daily Herald"?

Aeronautical Research and Development (Expenditure)

Mr. Jay: asked the Minister of Supply the total of public money spent by his Department on aircraft research and development carried out by aircraft companies since April, 1945; and how much is now received by his Department by way of fees or royalties in consideration of the commercial exploitation of the results of this expenditure.

Mr. Sandy's: It would not be in the public interest to give information about Government expenditure on aeronautical research and development, the overwhelming majority of which is for military types.
The answer to the second part of the Question is about £l½ million a year.

Mr. Jay: Does the right hon. Gentleman agree that very large sums of public money have been spent in recent years on these objects by the previous Government? Does he not think that the expenditure has been justified by results, and is he satisfied with the financial return that the taxpayer has received for the assets that have been created?

Mr. Sandys: I think the late Government were fully justified in the expenditure they incurred in this field, and that the results fully justify it.

Inter-planetary Travel

Mr. Perkins: asked the Minister of Supply whether he will move to appoint a Select Committee to advise as to the steps necessary to ensure that this country does not lag behind in the development of inter-planetary travel.

Mr. Sandys: No, Sir. With all due respect to this honourable House, I do not believe that a Select Committee could

throw much light on the subject of interplanetary travel.

Mr. Perkins: Is my right hon. Friend aware that the Astronomer-Royal recently stated that from the scientific and engineering points of view inter-planetary travel must be considered a practical possibility? In view of the eminence of this gentleman and of the great development work taking place in America, will he consider appointing a small committee of scientists to advise the Government to ensure that we do not lag behind?

Mr. Sandys: I think that these informing studies must at present be left to private initiative. Even in this age of the Welfare State inter-planetary travel is a service for which the Government do not yet accept responsibility.

Mr. Emrys Hughes: Are we to assume that there is nobody stupid enough on the other planets to wish to come here?

Lieut.-Colonel Lipton: Pending a decision on the practicability of inter-Planetary travel, will the right hon. Gentleman co-operate with the Minister of Transport to facilitate travel between different points in the West End of London?

Mr. I. O. Thomas: Would the Minister agree that it would be advisable from all points of view for the Powers on this planet to seek to settle their differences before entering into relationship with other planets?

Mr. Perkins: asked the Minister of Supply to what extent development work is being undertaken towards developing inter-planetary travel.

Mr. Sandys: None, Sir. The problems of this world are at present more than sufficient to occupy the Government's scientific resources.

Mr. Gibson: No imagination.

Iron and Steel Bill (Trade Union Discussions)

Mr. Lewis: asked the Minister of Supply if he will make a statement on his recent discussions with representatives of the trade unions on the question of the denationalisation of the iron and steel industry.

Mr. Sandys: Yes, Sir. 1 had meetings with representatives of the Trades Union


Congress on 2nd January and 15th January to discuss the provisions of the Iron and Steel Bill. I will, with permission, circulate in the OFFICIAL REPORT the text of the agreed statement which was issued.

Mr. Lewis: Can the Minister say whether the T.U.C. are generally in favour of the plans of the Government or against them?

Mr. Sandys: I would not like to add to the agreed statement.

Following is the statement:

Meeting of 2nd January. Agreed statement issued on 2nd January, 1953.
The Minister of Supply today met representatives of the General Council of the T.U.C. and of the principal trade unions in the iron and steel industry. The purpose of the meeting, which was held at the invitation of the Minister, was to discuss the provisions of the Iron and Steel Bill.
Whilst it was made clear that the T.U.C. maintained its opposition to the Government's policy of denationalisation, a useful exchange of views took place on various aspects of the Bill, and the Minister undertook to consider certain detailed amendments suggested to him by the delegation.

After the second meeting a statement was issued to the effect that the earlier discussions had been continued.

Iron and Steel Price Schedules

Mr. Erroll: asked the Minister of Supply why deposited schedules to the Iron and Steel Prices Orders are not available for distribution or sale to those manufacturers and distributors likely to be affected by them.

Mr. Sandys: Owing to their bulk, complete deposited schedules have since price control was introduced in 1939, never been distributed or sold. They are, however, available for inspection at certain places.

Mr. Erroll: Is it not the case that certain trade associations have copies and that this gives an advantage to those who are members of such trade associations over those who are not?

Mr. Sandys: Abbreviated schedules relating to the range of products most commonly in use are widely circulated to manufacturers and particulars of price changes are published in trade journals. Also, my hon. Friend might like to know that a complete set is in the Library and, I am told, it stands a foot high.

New Factory Space (Prices)

Mr. Gibson: asked the Minister of Supply whether he will introduce legislation to prevent firms engaged in vital defence work, who need extra factory space to enable them to increase production and improve their efficiency, from being forced to pay high prices for additional factory space.

Mr. Sandys: No, Sir.

Mr. Gibson: Are we to take it that the Minister is not concerned about cases such as the one he knows about, where a firm engaged on armaments production and needing extra space found themselves exploited over the price they were asked to pay for such space? In the instance I have given him, the price of a factory rose in seven days from £7,000 to £12,000. If that goes on all over the country, will it not have a serious effect on the cost of all kinds of production?

Mr. Sandys: I did not say that I was not concerned. What I said was that I was not proposing to introduce legislation.

HOUSE OF COMMONS CATERING

Dried Milk

Mr. Dodds: asked the hon. Member for Woolwich, West, as Chairman of the Kitchen Committee, if, on the grounds of economy, the Refreshment Department will use only skimmed milk powder instead of fresh milk in bulk cooking and for beverages.

Mr. Steward: The Refreshment Department will try out the hon. Member's suggestion as soon as supplies of dried milk are freely available. At the present time milk powder seems to be in very short supply.

Mr. Dodds: Does not the hon. Gentleman appreciate that the Ministry of Health are endeavouring to get Dartford Hospital to use skimmed milk powder in milk puddings, and does he not think, if there is a scarcity, that at least it would be better to allow the hospitals to use liquid milk for their patients and to ask Members of Parliament—

Mr. Speaker: I do not think the Chairman of the Kitchen Committee is responsible for hospitals.

Refreshment Trolleys

Brigadier Medlicott: asked the hon. Member for Woolwich, West, as Chairman of the Kitchen Committee, if he will now revive the former custom of providing a refreshment trolley on the Committee floor for the use of Members serving on Standing Committees.

Mr. Steward: It has been found more economical to provide the morning service of refreshments in the Members' Tea Room, which is open at 10.15 a.m. and where there is a wider choice of items.

Brigadier Medlicott: Is it not clear that this does not meet the point, in that it is impossible even for the most fleet of foot to get back from the Tea Room to the Committee floor when a Division is called? Could not this be looked at again, as it is a useful amenity?

Mr. Steward: I will look into the matter, following the suggestion of the hon. and gallant Member.

Mr. Callaghan: Was the absence of tea trolleys the reason why the Steel Bill was not sent upstairs?

NATIONAL INSURANCE

Departmental Administration Expenses

Mr. Langford-Holt: asked the Minister of National Insurance what steps he is taking to reduce from 6 per cent. the percentage ratio of administrative expenses of his Department to the total sum paid out in benefits.

The Parliamentary Secretary to the Ministry of National Insurance (Mr. R. H. Turton): I would refer my hon. Friend to the reply given to my hon. Friend the Member for Huntingdon (Mr. Renton) on 10th November, 1952, a copy of which I am sending him.

Mr. Langford-Holt: Could my hon. Friend tell the House at what figure he and the Minister are aiming, as, quite obviously, there is such a figure.

Mr. Turton: Up to the middle of December there was a saving of staff of some 960. Since that date we have been taking every step to simplify and reduce the amount of administrative work in this Department.

Mr. Blenkinsop: Is the Minister aware that the Ministry expense ratio is much lower than that of comparable private companies?

Contributions (Non-Payment)

Mr. Langford-Holt: asked the Minister of National Insurance how many persons have been prosecuted for failure to contribute to the National Insurance scheme; with what results; and how many it is now estimated have never contributed.

Mr. Turton: Since 1st January, 1949, approximately 7,900 persons have been prosecuted for non-compliance, of whom about 3,200 were employers who had failed to pay contributions for their employees. In the great majority of cases fines were imposed. It is not possible to estimate the number of people who have never contributed, but there is no reason to suppose that it is large.

Mr. Langford-Holt: Is my hon. Friend aware that this Question is unique, inasmuch as it asks for information?

Widowed Pensioners

Sir H. Roper: asked the Minister of National Insurance the estimated number of pensioners widowed before 1926 who will convert to a retirement pension in 1953.

Mr. Turton: I regret that no reliable estimate can be made.

Drafts (Postal Losses)

Mr. Janner: asked the Minister of National Insurance whether he is aware that a large number of postal drafts sent to persons entitled to sickness benefit are lost in the course of post each year; that these drafts are distributed in such a way that any persons can cash them; and whether he will institute a new scheme of distribution to avoid the present loss to public funds and the inconvenience caused to those who are entitled to the payments.

Mr. Turton: No, Sir. The number of postal drafts lost in course of post is inconsiderable in relation to the large number issued each year.

Mr. Janner: Is the Minister aware that in spite of the fact that the number lost may be inconsiderable in proportion to


the number sent out, it causes a considerable hardship to the people concerned if they do not receive them? Will he see that a person who has lost a draft gets relief in the interval before it is found?

Mr. Turton: Every care is taken to see that these postal drafts are replaced as soon as possible. There has to be some delay to obviate the double issue of drafts. In the case of which the hon. Member is thinking, the draft was handed in to a house three doors away owing to failure to address the draft properly. His constituent received that draft within four weeks and every step was taken to expedite the matter.

Stamps (Price Increase)

Mr. Lewis: asked the Minister of National Insurance the percentage increase in the price of social security stamps during the year ended December, 1952.

Mr. Turton: During 1952, the price of stamps for the main rates of contribution was increased by amounts which varied between 10 per cent. and 14 per cent.

Mr. Lewis: Is the Minister aware that the catering trade recently sent out a list of 50 articles which had gone up in price over the last year from 6 per cent. to 90 per cent.? As the hon. Gentleman has stated that the price of social security stamps has risen by only 6 per cent., can we take it that he will correct the percentages issued and ask the catering employers to send out a new list with the extra percentages correctly added?

Mr. Turton: I have given the House the correct percentages. The benefits, of course, have gone up by 25 per cent. in some cases.

Mr. Speaker: Mr. George Brown.

Mr. Follick: On a point of order. As my right hon. Friend the Member for Belper (Mr. G. Brown) is not here, Sir, and as Question No. 68 affects both our divisions, could the Minister make a statement after Questions?

Mr. Speaker: I have not had notice of that.

FUEL AND POWER

Coal Gas, Normanton and Rothwell

Mr. A. Roberts: asked the Minister of Fuel and Power the constituents, in percentages, of coal gas supplied to the Normanton and Rothwell districts, Yorkshire.

The Minister of Fuel and Power (Mr. Geoffrey Lloyd): This is a matter of day to day operation of the North-Eastern Gas Board, and I am asking the Board to write to the hon. Member.

Retired Electricity and Gas Officials (Pensions)

Mr. K. Thompson: asked the Minister of Fuel and Power if he has yet decided to make regulations under the Electricity Act, 1947, to give to retired officials previously employed in local government electricity undertakings benefits equal to those provided under the Pensions (Increase) Act, 1952; and if he will make a statement.

Mr. Osborne: asked the Minister of Fuel and Power if he will now take steps to give the benefits of the Pensions (Increase) Act, 1952, to retired employees in the electricity supply industry and the ex-local government employees who retired before vesting day; and if he will make a statement on their position.

Lieut.-Commander Hutchison: asked the Minister of Fuel and Power if he can now say whether he will make regulations under the Gas Act, 1948, to give ex-municipal pensioners benefits similar to those conferred on other retired local government officers by the Pensions (Increase) Act, 1952.

Mr. Geoffrey Lloyd: I am not yet in a position to make a statement on this question, but I will do so as soon as possible.

Mr. Thompson: Will my right hon. Friend bear in mind that there is a great deal of anxiety among a large number of people about this long delay, and will he please do what he can to expedite a decision in the matter?

Mr. Lloyd: Yes, but, as my hon. Friend knows, questions of pensions are almost inevitably complicated and require consultation with numerous bodies.

Mr. Shurmer: When the Minister says that these matters are complicated, is he aware that quite a number of ex-municipal employees of the City of Birmingham gas undertaking are suffering as a result of the delay in the increase of pensions? There cannot be any difficulty in giving this increase to these pensioners.

Captain Duncan: Was not this question raised at the beginning of December, which means, therefore, that my right hon. Friend has had two months to consider it? When will he be ready to make a statement?

Mr. Lloyd: I have had to consult the British Electricity Authority and the Gas Council, who, in turn. have had to consult the area boards.

ATOMIC ENERGY (INDUSTRIAL USE)

Mr. Sandys: I should now like to answer Question No. 37, Mr. Speaker.
The production of electric power from atomic energy raises a number of novel problems. These have been studied in the light of the experience gained with our graphite piles at Harwell and at Windscale. We have also had the benefit of valuable discussions with the Canadian experts about the results obtained in the operation of their heavy water reactor at Chalk River, Ontario.
The most certain method of generating power from atomic energy would be to build an improved type of natural uranium reactor enclosed in a pressure shell, the heat produced being transferred by a gas under pressure through a heat exchanger to a conventional electric power generator. As a by-product this would yield plutonium, which could be used as fuel for further reactors. The potentialities of such a reactor are being actively studied. If the prospects are shown to be favourable, we shall consider constructing an experimental atomic power station of this kind.
At the same time, we hope to develop reactors of a more advanced type, known as "breeder-reactors," by reason of the fact that they are designed to produce more fissile material than they consume. To facilitate the study of these methods, a small experimental

reactor of this kind is being built at Harwell. It should be completed in a few months' time. Meanwhile work is proceeding at Harwell and Risley on the design and development of a full-scale breeder reactor, capable of producing substantial amounts of electricity, and we are at present looking for a suitable site for the construction of this plant.
We are also building at Harwell a natural uranium reactor moderated with heavy water, which will produce a much more intense flow of neutrons than is possible with our present equipment. This reactor is for research work and will not be used to generate power. It will, however, greatly expand the quantities and variety of radioactive isotopes which can be produced for industrial, scientific and medical purposes. This project will take about four years to complete.
We do not propose to undertake work on the application of nuclear energy to propulsion until more experience has been gained in the development of stationary nuclear power plants.
It is still too early to say with any precision how soon electricity generated from atomic energy will be available on a significant scale for industrial purposes. It should certainly not be imagined that nuclear reactors will in the near future supersede existing methods of producing electric power. But if, as we hope, the technical problems involved are successfully solved and these new methods prove to be economical, there is no reason why nuclear reactors should not before very long provide a useful additional source of industrial power.

Mr. Hector Hughes: Is the Minister aware that about five years ago this question was raised in the House and it was indicated that nuclear power units would be available within a few years for the propulsion of ships? Is he now in a position to indicate when nuclear power units will be available of a size, weight and price that will be appropriate for use in ships, on trains, in factories and in homes?

Mr. Sandys: I am not aware of the statement to which the hon. and learned Member refers, but I for my part am not prepared to go further than I have gone in my reply in prophesying the future application of this force.

Mr. Stokes: Whilst admitting that I find these highly technical problems rather difficult to ask supplementary questions about at Question time, may I ask the Minister a question on a matter of a simpler nature: Can he say what is happening with regard to the use of the heat generated in atomic piles which might be used for the generating of steam and other heating purposes?

Mr. Sandys: That goes rather outside the Question on the Order Paper.

Colonel Clarke: Can my right hon. Friend say what are likely to be the comparative costs of generating electricity from nuclear power and by the traditional methods?

Mr. Sandys: We have made certain calculations, but I should not like to state them publicly.

Mr. G. R. Strauss: Is the Minister aware that in the view of those who, until a little time ago, were responsible for all atomic energy activities, the advance which seems to have taken place during recent years in thoughts and experimentation on the industrial side, as expressed to us today by the right hon. Gentleman, seems extremely satisfactory and promising? Will he bear in mind that all this great experimental work, which requires a great deal of initiative and all sorts of qualities from the best scientists in the land, is all being carried out under direct Government agency, direction and inspiration?

Mr. Bellenger: Although it is interesting to hear the Minister's answer in relation to the generation of electricity, may I ask how he proposes to extend the experiments and the practical application of these experiments to industry itself without enlisting some aid from private industry rather than Government-controlled stations? Is the Minister aware that in America the application of certain of these experiments is being carried out in industrial undertakings, both to the benefit of the community at large and for strategic purposes?

Mr. Sandys: We are obtaining considerable co-operation from private industry.

Mr. Hughes: Is this country collaborating with other friendly countries in this matter instead of wasting our energies in independent research?

Mr. Sandys: I do not think that there has been any waste of energy in this research.

Mr. Hughes: Are we collaborating with other countries?

Mr. Noel-Baker: While I think that everybody, including my hon. and learned Friend, will welcome what the Minister has said today, may I ask whether the Government intend to participate in the work of the international station for research into the civil use of atomic energy, which is to be started by a number of Governments at Geneva on the initiative of U.N.E.S.C.O.?

Mr. Sandys: I think that that question has already been asked of my right hon. Friend the Foreign Secretary on an earlier occasion.

QUESTIONS TO MINISTERS (ROYAL COMMISSIONS)

Mr. Speaker: I have a short statement with which to trouble the House. On Wednesday last, the hon. Member for Oldham, West (Mr. Hale) drew the attention of the House to the fact that a Question which he had put down to the Prime Minister had been transferred to the Home Secretary. The Question related to the progress of the Royal Commission on Capital Punishment. The right hon. Gentleman the Leader of the Opposition put the point that while transfer of Questions was common practice in Departmental matters, it was not appropriate to Questions about Royal Commissions, which should be answered by or on behalf of the Prime Minister.
I promised to look into the matter and have had a search made for precedents and I find that there has been no wholly consistent practice in the matter. Sometimes one Minister has answered, sometimes another. On 30th October, 1945, notice was given of a Question to ask the Minister of Labour when he expected to receive the Report of the Royal Commission on Equal Pay. This Question was transferred to the Chancellor of the Exchequer, who answered on 1st November. A Question on the same subject had been answered by the Prime Minister on 31st October. Others were put to, and answered by, the Chancellor of the Exchequer on the 8th and 13th November.
On 24th November last a Question asking for a Royal Commission on safety on the railways was answered by the Minister of Transport. As far as I can discover, the general practice is that Questions asking for a Royal Commission to be set up, and Questions on the progress or the Report of a Royal Commission either addressed to or transferred to the Departmental Minister if that is appropriate and if the matter is not considered to be one of such major importance as to necessitate an answer by the prime Minister.
On the other hand, Questions asking for the membership or terms of reference of a Royal Commission have generally been answered by the prime Minister since he alone makes recommendations on these matters to the Sovereign. Even in this case, however, the practice is not invariable, since the membership and terms of reference of the Royal Commission on Land in Kenya were announced by the Secretary of State for the Colonies in the course of debate.
I must remind the House that these matters are quite outside my province and that I can only help by reporting what, from study of the OFFICIAL REPORT, the practice appears to have been. On the point of what questions on this subject would be accepted by the Table, provided there is prima facie reason to believe some Minister to be responsible, I think a question addressed to any reasonably likely Minister would be accepted. The actual responsibility, and any necessary transfer, would then be worked out by the departments concerned and, with that, as I have repeatedly had occasion to remind the House, I cannot interfere. The answer should be given by the Minister who is, in fact, responsible and the question of responsibility is one for Ministers and not for the authorities of the House.

Mr. H. Morrison: I am sure that the House is much obliged to you, Sir, for the information you have given us, although it still leaves us in some doubt as to what the appropriate course would be. Would it be a reasonable deduction from what you said—apart from matters which arise in debate, when a Minister in charge is speaking in the debate and, therefore, it is inevitable that if the question of a Royal Commission arises he will

refer to it largely at the request of the House—that, generally speaking, Questions about the initiation of a Royal Commission, composition and terms of reference of a Royal Commission, are for the Prime Minister and Questions thereafter about the progress and ultimate Report of the Royal Commission are more likely to be for the Departmental Minister? If we could reduce this to a rational formula it would be better. I wonder if that would be approximately right.

Mr. Speaker: I think that what the right hon. Gentleman has said is approximately right. In this matter, of course, I can only give the House the fruit of my researches into what the practice has been. I think it is the practice that Questions referring to the personnel or terms of reference of a Royal Commission should be addressed to or answered by the Prime Minister, or someone on his behalf. But there have been numerous cases in the past of hon. Members who have asked whether a Royal Commission will be appointed addressing their Questions to Departmental Ministers and that is the way the matter stands, but what the right hon. Gentleman says is, I think, in accordance with the practice of the House.

Mr. Hector Hughes: May I ask your guidance about this very matter, Sir? I think the House is in a real difficulty here. The Question asked by the hon. Member related to the Royal Commission on Capital Punishment. I also have frequently put Questions down concerning the delay of that Commission in issuing a Report. It seems to me that there is no way whereby hon. Members can accelerate the bringing in of a Report by a Royal Commission, as in this case, and the House is, therefore, in great difficulty. I am asking you how the House can accelerate the bringing in of a Report where there is, as in this case, undue delay in bringing in a Report?

Mr. Speaker: There is no way in which a matter of that sort can be accelerated if a Royal Commission is set up. The only way I can suggest is for hon. Members to ask Questions, making their opinions known. There is no power I know of whereby a Royal Commission, once it has been set up, can have a term set to its labours before it reports.

Mr. I. O. Thomas: Would you indicate, Sir, how and by whom it is determined that Questions shall or shall not be answered? You referred to practice in this respect. Who determines such practice? Is it a question of accident, or is there any question of design in such practice? Is it not about time—if we have reached this stage of not being able to have effective guidance even from you, Mr. Speaker—that the question as to the appropriate channel for putting the Question and through which a reply shall be received should be definitely considered and determined by the House?

Mr. Speaker: In general, Ministers are, as the name of their Department indicates, responsible for particular areas of Government activity. But there are, as the hon. Member will realise if he reflects, certain subjects which overlap from one Department into another—questions of food and agriculture, for example, and questions of tariffs and import duties, which may concern both the Treasury and the Board of Trade. A number of other examples will occur to hon. Members. In that case, it is for the Ministers themselves, in the light of the actual terms of the Questions submitted, to decide which one shall answer the Question and that has been the practice in my time.

Mr. Spence: In the case of Questions on a Royal Commission and Ministerial responsibility would it not be in order, in the first instance, to address a Question to the Prime Minister of the day asking to which Minister the Question itself should be put? Would that not deal with the changing circumstances?

Mr. Speaker: I think the Question would not be out of order.

Orders of the Day — SUPPLY

[1ST ALLOTTED DAY]

Considered in Committee.

[Sir CHARLES MACANDREW in the Chair]

CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATES, 1952–53; ARMY SUPPLEMENTARY ESTIMATE, 1952–53

CLASS IX. VOTE 1

Orders of the Day — Ministry of Supply

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £16,000,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the salaries and expenses of the Ministry of Supply for the administration of supply (including research and development, inspection, storage, disposal and capital and ancillary services related thereto); for the supply of atomic energy and radioactive substances; for administrative services in connection with the iron and steel nonferrous and light metals and engineering industries; and for miscellaneous services.

3.49 p.m.

The Minister of Supply (Mr. Duncan Sandys): The need for this Supplemenary Estimate arises in the main from the increased rate of expenditure on research and development. In the original Estimate we provided for expenditure amounting to £128 million on research and development, including new works for that purpose. After all feasible economies have been made, we expect expenditure on research and development to exceed that figure by about £21 million. This covers additional expenditure on stores, materials, equipment, buildings and also payments to industry and universities for the research and development work which they carry out on our behalf.
Our ability and that of our Allies to defend ourselves against the numerically stronger forces which we may find ranged against us depends upon our maintaining at all times superiority in the technical quality of our weapons. It must, therefore, be our policy to press ahead energetically with research and development, so that we shall be able to bring into service as quickly as possible new and more advanced types of equipment.
Some part of this increased expenditure is, of course, due to increases in prices and wages, but in the main it provides gratifying evidence that the progress of the technical and scientific establishments of the Ministry of Supply and of the industries which are working with us has been more rapid than we expected a year ago. The acceleration in this work is directly reflected in the expenditure under Subheads B. 2 and B. 3.
This expenditure is not, of course, spread evenly over the whole of this wide field. It has been deliberately concentrated on the points that matter most. A special effort has been made to accelerate development of new types of airframes, aero-engines, electronic equipment and improved methods of jet propulsion.
Work on guided rockets has been intensified, and further encouraging progress has been achieved. Weapons travelling at several times the speed of sound are being successfully evolved for use in both defensive and offensive roles. There can be no doubt that the guided rocket is one of the decisive instruments of war which will dominate the military scene in the none-too-distant future. We therefore, take the view that, wherever else retrenchment may be acceptable, work on guided rockets must be allowed to forge ahead, and that to hold back our scientists or technicians in any way in this vital field would be false and dangerous economy.
Atomic energy is another sphere in which our effort has been expanding. The successful test at Monte Bello a few months ago completed an important phase in our programme of atomic research, and opened up to us a wider horizon for further scientific activity. Likewise, the progress made in studying the peaceful applications of this dreadful force, to which I referred in a statement a few minutes ago, has justified an expansion of our development programme in this field and a corresponding increase in our expenditure.
Expenditure on atomic energy is also included under Subhead B. 4.—"Loans for the production of uranium." Here we are asking for an additional £2,500,000. There are two reasons for this. The first is that the process of extracting uranium as a by-product from gold-mining in South Africa has gone ahead more rapidly than we expected. Additional

mines have now been brought into the scheme, and in consequence the drawings upon the loan during the present financial year are likely to be greater than was anticipated. The second reason is that there have been encouraging developments in Australia which have justified loans to uranium producers in Australia as well as in South Africa. I do not believe that I need stress the immense importance of stimulating to the utmost the production of uranium in the British Empire.
Under Subhead E—"Transportation charges"—we are asking for an additional £2,600,000. Of this £1,400,000 is due to the increase in the flat rate charged by British Railways for the carriage of stores and materials for the Ministry of Supply. The balance arises from the increased volume of shipments by sea, partly in connection with operations in the Middle East and Malaya. It also includes the additional cost of shipping a large consignment of picrite from Canada.
Finally, under Subhead G. 1—"Works Services"—we ask for a supplementary vote of £5,850,000. Nearly £5 million of that sum relates to our research and development establishments and arises in connection with the expanded programme of work to which I have just referred. Apart from building work at these establishments, the only other substantial item under this subhead is the increased expenditure incurred on an agency factory for the manufacture of tanks. Not only are these tanks produced for our own re-armament programme, but, as hon. Members know, we have recently secured a substantial order for them from the United States for delivery to members of the N.A.T.O. They will, therefore, earn much-needed dollars.
I hope that I have said enough by way of introduction of this Supplementary Estimate, but if more details are requred the Parliamentary Secretary or I will be glad to intervene again.

Mr. John Strachey: I have only a very few questions to ask of the Minister at this stage. I ask them really in the capacity of an old customer of the Ministry of Supply. The Minister has told us clearly what are the general reasons for these substantial—and they are substantial—augmentations of these


Votes in the matter of research and development, but there are one or two more specific questions to which I think the Committee would like to know the answers before agreeing to the Supplementary Estimate.
I imagine that under subhead B. 2 the figure is a straight increase, as the Minister said, of the amount of research being done by his Ministry, and the cost of it, partly due to prices. The item which I think will obviously strike the Members of the Committee is Subhead B. 3, under which we are asked for no less than £10 million, or very nearly that, for outside research. That is a very substantial increase, and it is a little difficult to see why an under-estimate of that magnitude was made.
The Minister speaks of the development of atomic work and of the test which was carried out off the coast of Australia, but all that was surely tare-seen at the time of the Estimates. It is a little difficult to understand why an extra £10 million is needed for the development of research outside the Ministry—at universities and in private firms. Is it that large numbers of further development contracts have been placed? One would not at first sight have thought that, because it surely takes much longer than one year for anything to result from development contracts and for substantial payments to be made. I think the Committee are a little mystified as to why development contracts are being given in additional numbers for guided missiles or for new types of aircraft which should necessitate anything like an extra £10 million, even though no doubt they are highly desirable.
4.0 p.m.
Coming to Subhead B. 4—"Loans for the Production of Uranium"—about which the Minister spoke, the Committee would not expect him to tell us very much about the places or methods for which those sums are needed. We are told in the Memorandum, and the Minister mentioned it himself, that it is partly for South African development and partly for Australian development. I should be interested, as I am sure the Committee would be, to be told how these loans work; what is the financial mechanism of them and the need for them? Are they made mainly to individuals or to

firms? I imagine that on the Rand large-scale mining companies are concerned, but are loans made to individual prospectors in Australia?
Again, why is it necessary to make use of these methods? I should imagine that the production of uranium is highly profitable. Why is it impossible for it to be developed in the usual way like any other material, by giving contracts and purchasing it as and when it becomes available? Why do the Government have to put up the capital, especially in the case of the Rand, where the companies concerned are large, substantial and profitable organisations? At first sight it is difficult to see why public money has to be loaned for this purpose. I am not suggesting that there may not be a perfectly good explanation, but I think the Committee would like to hear it.
On transportation charges, we understand the increase in rail charges. I take it that is a sort of automatic increase which could not be foreseen. But why should there be this substantial increase of over £1 million in sea freights? I think I am right in saying that there is a decrease rather than an increase in prices there. It must mean that there is a very substantial and unforeseen increase in the volume of shipments, and one does not quite see why there should have been such a sharp increase in the movement of materials about the world in connection with research and development. The Minister spoke of Far Eastern operations, but surely those are not concerned with research and development.
On Subhead G, I should be interested to know how much of the sum actually went to housing. In my experience of these matters, which is indirect but which did arise in the War Office, almost the key question in getting new production was whether housing was available.
The Minister mentioned tanks, and I am certain the whole Committee is glad that additional tank manufacturing capacity is now coming into operation. It is a slow business to make tanks, and a still slower business to build the factories which make them. This had to he started, and was started, as one of the very earliest features of the re-armament programme; in fact the preliminary work was done before the re-armament programme came into operation. As the


Minister rightly claims, it is showing valuable results, both in the field of military preparedness and in the economic field. It will be a good investment from the point of view of pure economics, apart from defence. But I remember occasions when one of the real features was the development of housing facilities round the proposed new plant. Those are one or two questions which the Committee might like to hear answered before we part with this Vote.

Captain J. A. L. Duncan: I do not wish to repeat what has already been said, and some of the questions asked by the right hon. Member for Dundee, West (Mr. Strachey) had occurred to me. I wish to raise one point on transportation. I see that there is the sum of £1,200,000 for sea freights to meet an increase in shipments. I also see that in the Army Supplementary Estimate there is an increase of over £1 million for the conveyance of stores by sea and by air. At what point are the goods which the Ministry of Supply make for the Service Departments delivered? Are they delivered at the home station, or at the station, either Air Force, Army or naval, abroad? Is there any overlapping in allotting transportation costs?
I think that delivery should take place at home, and that it would be a cleaner job if subsequent transportation costs overseas, by sea or by air, were the responsibility of the Service Department concerned. I should like an assurance that some clean and tidy financial arrangement is made to ensure that there is no overlapping in transportation charges between the Ministry of Supply and, for instance, the War Office, in whose Vote we are to be asked for another £1 million for the same object.

Mr. Emrys Hughes: I wish to asked some questions which are perhaps a little more searching. I should like the Minister of Supply to give us a further and more detailed indication of what exactly is meant by research. "Research" is a word which can cover a wide field of activities. We have found, when questioning Ministers, that even an important Minister like the Foreign Secretary does not appear to know what is being done in the Ministry of Supply. I asked a Question about the nature of the research in certain Departments. I asked, for example, about the research department at Porton biological—

The Chairman: On a Supplementary Estimate of this nature one can only discuss the reason for the increase in the Estimate, and not the original policy, which has already been decided on.

Mr. Hughes: My point is that there is a subhead for research which is so vaguely worded that I wish to put a question to the Minister about whether this additional sum includes any further expenditure upon the biological and chemical station at Porton. When the Minister comes with such a large item for research I believe we are entitled to have a very definite statement about whether it includes anything for this biological and chemical research station. I think that question is relevant, and now that I have put it in a definite form, I hope I shall receive an answer.
I am not at all enthusiastic about these Supplementary Estimates. Indeed, I wish there had been a definite challenge to them from this side of the Committee. At a time when there are huge economies in our social services, we have had brought here today Supplementary Estimates the greater part of which are purely for war purposes. I should like the Minister to make some attempt to estimate what proportion of this Supplementary Estimate is for defence.
Is any sum allowed for the purpose of research for developments which are not identified with the rearmament effort? Recently I have seen urgent criticism relative to building. Building is mentioned in this Supplementary Estimate. There has been some relevant criticism of the very small amount which is being spent on research into the building industry. I should like to know whether the Ministry of Supply are trying in any way to divert the ability, energy and technical skill of our scientists into work which would be useful in the development of the nation's industries.
The items which have received major consideration today are purely for defence or, not merely for defence, but for offensive purposes. Like my right hon. Friend the Member for Dundee, West (Mr. Strachey), I should like to get a little more information about the guided missile station in Australia. I have tried to put Questions, but inevitably there comes down this curtain of security. this iron curtain which is round the Ministry of


Supply. Whenever we ask about any matter in which we are really interested, we are told that it is not in the national interest that we should know.
I should like to know the total amount which has been spent in Australia. What proportion of the expense is borne by the Australian Government? Can we get some inkling of what results have been obtained for this expenditure to justify the Committee in voting this additional sum. I have my own doubts whether all this research into guided missiles is likely to benefit this country at all. If there had been a Division I should have been prepared to vote against this Supplementary Estimate. I do not see why the countries which are united in the so-called Western defence should appear to be spending large sums in isolation from one another. For example, in connection with the expenditure in Australia, have the results been pooled?

The Chairman: Is not that going rather outside this Supplementary Estimate? We can deal only with the increases asked for. The original policy has been settled.

Mr. Hughes: I should like to know whether any of the increased expenditure has been spent in Australia. Surely we are entitled to know what value is likely to accrue to this country. If there is increased expenditure, apart from the expenditure of other countries, would it be less if we were in some way pooling our resources with the United States of America?
The Minister mentioned the explosion at Monte Bello. It seems to me that when we are facing a severe economic crisis and when we have to cut down expenditure on meals for school children, we ought to pay attention to every Supplementary Estimate of this kind which is brought before us. I believe that the whole of the Monte Bello experiment, which presumably is covered by this increase in the Estimate, was absolutely unnecessary if in another war we are going to fight alongside the United States. I believe that, in the scare atmosphere which is being created, large vested interests are coming into being, in addition to the other vested interests that we have already. The Minister of Supply can now come along and ask us for almost

anything in huge sums which are clouded in mystery and the expenditure of which is not really necessary in the interests of the country.
4.15 p.m.
I do not believe that we are entitled to pass an increased Estimate for guided rockets, for example. What are those guided rockets going to hit? If they are going to hit something, are we not likely to expect other guided rockets as a present in return? This country is in danger as a result of the development of this new kind of warfare which the Minister has said will dominate the scene in the future. I do not believe that we shall get increased value for the defence of the people as a result of this increased expenditure. Only a fortnight ago in "The Times" a distinguished retired Air Chief Marshal, Sir Philip Joubert, told us that we did not even have a fighter aircraft today which could stop a jet bomber coming along and dropping atomic bombs on this country. If that is true, I do not see that this is defence at all. It is the diversion of a huge amount of our national resources from industry and useful research which would be of real benefit. If we cannot stop a jet bomber, how are we to stop a guided rocket?
I asked these questions rather prematurely three or four years ago. I do not see that in this Estimate we are doing anything but spending a huge amount of the money of the British taxpayer on items which will bring very little result indeed. I do not envisage any increased security as a result of this expenditure. I see only increased danger for the civilian population. I wish that. instead of acquiescing in these proposals, the Opposition had taken a stand against them.

Mr. Gerald Nabarro: I wish to ask one or two questions about Subhead B. 3—not for the same reasons as the hon. Member for South Ayrshire (Mr. Emrys Hughes)—which calls for an additional sum of £9,900,000 for research and development work by industry, extra-mural research at universities, and so on.
The references made by my right hon. Friend to the development of atomic power for use in industry, both in his statement this afternoon and in his introduction of this Supplementary Estimate,


prompt me to inquire how much out of the additional £9,900,000 is to be devoted to peaceful purposes, by which I mean the expediting of means of producing electric power for industry, and how much is for a purely warlike purpose, or, indeed, whether it is possible to differentiate between the two in this Supplementary Estimate.
In this connection, I do not think that I should be out of order in asking my right hon. Friend to what extent the Government are acting in this matter of industrial research into increased power development as a sole or monopoly interest in the development of atomic power and to what extent the British Electricity Authority are participating. The nationalised authority maintains a large and expensive research organisation. Is that carrying out parallel development enquiries and research, or are the Government making themselves responsible at Harwell and other similar establishments for the whole of this industrial research into the development of additional power by atomic means? If my right hon. Friend could clear up these two points, it would help us to understand why a sum of nearly £10 million is asked for in this Supplementary Estimate.
I very strongly support the voting of any reasonable additional sum of money that is required for hastening the development of additional electric power in this country. In fact, in Britain with every month and every year that passes we are lagging farther and farther behind the United States, which has enormously greater electric power resources at the elbow of every workman employed in industry than we have in this country. In the United States today, there are no less than 75,000 megawatts of installed capacity in power houses, compared with only 16,000 megawatts of installed capacity in this country, and the gap is widening year by year. It is for that reason that I think that, in the industrial and purely peaceful sphere, as opposed to atomic development for warlike operations, the very highest priority ought to be devoted in the establishments at Harwell and elsewhere to the primary and single purpose of seeking to develop additional sources of electric power cheaply, economically and quickly.
Finally, in that connection, I would strongly endorse what my right hon. Friend said in introducing this Supplementary Estimate that a great deal of misconceived optimism has been shown in the last few months in regard to the rate of development of the use of atomic power for industry. Several newspapers have suggested in the last few months that we may see atomic power being used to drive power house generators in a matter of a year or two. In fact, of course, it may well be years, and the recently published Ridley Report on fuel and power resources came down very strongly in support of the view that it would undoubtedly be a very long time before this essential and very desirable form of development is achieved.
That does not in any way detract from or vitiate my argument that in the sphere of development for peaceful purposes, the greatest possible amount of money and energy ought to be devoted at once to finding alternative and additional means of providing electric power, in place of our steam or thermal power houses which are at present driven by coal.

Mr. Woodrow Wyatt: I want to ask one question on Subhead B. 3 in regard to the aircraft industry and the extra amount needed for research. I should like to ask the Minister to explain how the arrangements are made between himself and the firms concerned on the civil aviation side. Do we take it that now, in fact, no research on civil aviation or jet propulsion takes place unsubsidised by the Government, or is any research still taking place under the auspices of private firms and paid for by those firms?

Mr. Geoffrey Wilson: I should like to ask a short question regarding Subhead B. 3 which has occurred to me in connection with an answer which the Minister gave earlier at Question time. In his opening statement, my right hon. Friend referred to guided missiles, rockets and jet propulsion, which the hon. Member for South Ayrshire (Mr. Emrys Hughes) has taken to refer entirely to war development. Of course, one of the principal developments arising from the study of rockets and guided missiles concerns knowledge of the upper atmosphere,


a region which, despite our present scientific knowledge at ground level, is outside our ken.
I hope that, when my right hon. Friend said in reply to my hon. Friend the Member for Stroud and Thornbury (Mr. Perkins) that we were not making any developments towards inter-planetary travel, he did not mean that nothing was being done about research into these regions which are beyond exploration by means of the more conventional methods of air travel. It is an important subject connected with radio and television, and all sorts of scientific developments are affected by what is going on above the stratosphere, which can only at present be reached by rockets. I should like to know whether any part of this Supplementary Estimate is concerned with rocket exploration of regions which we cannot otherwise reach.

Mr. Frederick Lee: I agree with the hon. Member for Kidderminster (Mr. Nabarro), who brought our attention to the fact that the United States has a far greater horse-power per head at the disposal of the workers than is the case in this country, and I should like the Minister to develop that theme a little more, because while, with one or two exceptions, we do not wish to divide against these Supplementary Estimates, we ought to have some more details about what they mean.
The amount asked for—nearly £10 million—is a very considerable sum of money. Incidentally, I do not quite understand the difference between the expenditure under Subhead B. 3 and that under Class IX, Vote 2, which is concerned with assistance to industry. Perhaps the Parliamentary Secretary will tell us what the difference is.
Returning to Subhead B. 3, we see that it is for research and development work by industry, extra-mural research at universities and so on, and the Minister said that much of the increase is due to the fact that we went ahead at a far greater pace than he anticipated at this time last year. I think it would be very helpful if the Parliamentary Secretary would tell us in just which sphere we have gone ahead at a more rapid pace than was expected.
As far as research in the universities is concerned, some of us have been extremely concerned that the results of that research have not been applied with the same speed in British industry as they are applied in the industries of our competitors. I hope the Parliamentary Secretary will say something on that side of the matter, and tell us what methods are being used by the Ministry of Supply to ensure that, this research having taken place with the Ministry's financial assistance, there is some link between the research and its application to industry at the earliest possible moment.
I know that, as regards the number of people engaged in research, it may be a question more for the Ministry of Education, because our ability to press forward with research depends upon the success we obtain in introducing more technologists and scientists. Here again, we are all extremely concerned that, in countries like the United States and Switzerland, our competitors—the largest and the smallest—are outstripping us enormously in the production of technologists and scientists. If the Minister of Supply, who, I am quite certain, wishes to go ahead at a faster pace with research and in getting the results through to industry, would concern himself with that side of the problem, he would be doing a good job of work. Perhaps the Parliamentary Secretary will tell us whether he is satisfied with the results in the universities themselves.
I should like also to refer to Subhead G. 1, which relates to new works. Perhaps we may be told where new works are being sited. The Minister referred to the need for new works and the co-operation between the Ministry of Supply, the Board of Trade and the Ministry of Labour in finding good sites for these new firms. We all know that there are some pockets of unemployment in the country which we are all desirous of mopping up, and, if we are to get the best results, it is very necessary that careful consideration should be given to the special position of the Development Areas when the Minister is making his decisions on siting these new factories. In some Departments no special consideration at all is being given to the position of Development Areas. They seem to be lumped in with the rest of the country, whereas the whole purpose of


the Distribution of Industry Acts was that they should be given very special consideration when questions of development are being discussed.
4.30 p.m.
I ask the Minister to tell us where his new factories are sited, and if, in the event of some factories falling to be sited, he will give very special consideration indeed to the question of the Development Areas. The Minister talked about the development of uranium. I have no doubt that we are all very keen to see this development take place, but whether the Foreign Secretary and the Minister of Fuel and Power will be quite as keen, I do not know. I recall my old friend Ernest Bevin saying that, given 20 million tons of coal for export, one has a foreign policy.
Whether in the long run it is going to be a benefit to a country whose chief raw material is coal that coal should be supplanted in this way, I do not know. That is something for the future, but it may give some of us cause for thought when we realise that the position of Britain in the world might well be measured by our ability to produce and export coal. I shall be obliged if the Parliamentary Secretary can answer the points I have raised on Subhead B. 3 and about the siting of new works in Development Areas.

Mr. Patrick Maitland: I wish to ask the Minister one question. As regards Subhead B. 3, can he indicate whether the failure of the United States to make available to us the results of their research is to any extent responsible for this increase? Sir John Cockroft stated publicly in New Zealand that the United States had not yet told us whether their breeder reactor was, in fact, breeding. I refer to the breeder reactor in connection with uranium. He said that such a reactor was being built at Harwell, and he left it to be inferred that with United States information available to us we could construct it more cheaply. Can the Minister say whether we shall have to spend more money owing to the failure of the United States to pass us information on this subject?

Mr. Michael Stewart: My right hon. Friend the Member for Dundee, West (Mr. Strachey) asked one or two questions about Subhead B. 4—the

loans—to which I should like to add a further question. Can we be told what arrangements are made for the repayment of the money advanced in this way? Does the additional sum provided here involve any change in the methods of repayment?
With regard to expenditure on research, to which many hon. Members have referred under Subheads B. 3 and G. 1, does the Parliamentary Secretary intend to reply to the questions addressed to him by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) as to the nature of the research that has been carried on? If he does, it will be extremely interesting, but I am rather doubtful whether he will. But he might at least go as far as this on the lines suggested to him by my hon. Friend.
As has been pointed out both by my hon. Friend and by the hon. Member for Kidderminster (Mr. Nabarro), we are not dealing here solely with matters which can be of use for defence purposes, and I should like to know whether, in so far as there is to be further research, it will be accounted for almost entirely by the accelerated production of weapons of war of the kind referred to by the Minister in his speech, or whether it represents to any substantial extent new discoveries in fields not connected with military and defence purposes.
We know that there are already certain very valuable and peaceful purposes for which atomic and nuclear research may be used. Do these additional figures represent any new departures or discoveries in these fields? When the Minister is deciding to approve a Supplementary Estimate of this kind, and to ask the approval of the Committee for it, does he consider how the additional research envisaged in these figures fits in with the research already being conducted either by other authorities in this country or by authorities in other countries?
I am sure that both the Minister and the Parliamentary Secretary realise that in this matter of research they have something far more than mere Departmental responsibility to consider. They are entrusted with the development of something that is making a major change in human history, something that stands in relation to our century like the invention of gunpowder did to a previous age. It is perhaps worth recording that in the reign

 
of the first Elizabeth the manufacture of gunpowder was prudently kept solely in the hands of the Government for reasons not so much of industry as of defence and security.
The Minister today wields a somewhat similar responsibility for something that may have similar potential results on the welfare of mankind. When we are asked to vote further sums of money for research, we have the right to be assured that before deciding to ask for that money the Minister has considered how the research on which it will be spent will fit in with any plan of research conducted either by this country or by this country and her Allies.
There are several references in the Supplementary Estimate to the increased sum of money being due partly to further progress and partly to higher prices. It is of considerable importance to know the comparative amounts of those two factors. I wonder whether the Parliamentary Secretary will be able to say with regard, for instance, to the figure of nearly £10 million under Subhead B. 3, what that figure would have been if there had been no increase in prices, and similarly, with regard to the sum of £4,500,000 at the beginning of Subhead G. 1.
Are we really being asked to vote money in order that more work may be done, or is this money necessary merely in order that an existing programme may be carried through? I raise this point because some little time ago the Prime Minister gave us to understand that it was the Government's policy to spread the defence programme over a longer period than was originally intended. It is surprising, in view of that statement, that we should be asked to vote further sums of money in a debate of this kind.
Of course, there are possible explanations. It may be that, while the defence programme as a whole is being spread out, it has been considered prudent that certain parts of it should be accelerated. Or it may be due to a less satisfactory reason, that, despite a general spreading out of the defence programme, it is still going to cost us more owing to higher prices. It has been the Government's contention that in defence as in other matters they would secure better value for the country's money. That is why I

repeat and stress the question of this extra money which we are being asked to vote. Can we be told, even if only in rough proportions, how much of it represents any real increase either in military preparedness or industrial strength, and how much of it is merely due to the inability of the Government to arrest a rise in prices?

The Parliamentary Secretary to the Ministry of Supply (Mr. A. R. W. Low): I will try and answer the many questions asked by hon. Members on both sides of the Committee. I think the majority of them have been put on Subhead B. 3 about which the hon. Member for Fulham, East (Mr. M. Stewart), who was my predecessor, has been speaking.
As he showed in his speech, my right hon. Friend, of course, attaches enormous importance to research. As the hon. Member for Fulham, East indicated, it is not possible for us to break down for the Committee's benefit the various items into which this research expenditure is divided. Therefore, 1 am not able to answer the question put to me by the hon. Member for South Ayrshire (Mr. Emrys Hughes).
Nor am I able to answer questions put to me by one or two other hon. Members; and I am afraid I cannot meet requests for enlightenment about expenditure under Subhead B. 3. As my right hon. Friend indicated, the extra expenditure is required because of increased effort and higher costs in respect, amongst other things, of research into airframes, aero-engines, jet propulsion, guided rockets, electronics and atomic energy. I am afraid that I cannot go further than that.
We have been asked whether there is some expenditure on research for civil purposes intermixed with this Vote. The answer is that there is some. That would include some expenditure on the air side for that purpose and, of course, some on atomic energy. A number of detailed questions have been put to me under this head. My hon. Friend the Member for Kidderminster (Mr. Nabarro) referred to the development of atomic energy. I can best answer his question by saying that that is, of course, the responsibility of my right hon. Friend; but at points where the problem facing him overlaps problems facing


others, and in particular the problems facing the British Electricity Authority, there is consultation with those concerned.

Mr. Nabarro: But is there division of cost in this matter? My right hon. Friend made the specific point that the use of atomic energy for electric power development would carry with it the use of existing generators in power houses. There must be, therefore, some overlapping. Is there any division of this cost between the nationalised Authority and my right hon. Friend's Department?

Mr. Low: The production of ordinary generators is, of course, a matter for the B.E.A. If my hon. Friend studies the answer which I have given, which was that at the point where the problem overlaps with their problems, there is consultation, he will find that that meets his question.
The hon. Member for Aston (Mr. Wyatt) made a point about research in the aircraft industry. As he probably knows, there is, of course, a great deal of research carried out by the aircraft industry for themselves. Research carried out by the Ministry of Supply in air matters is primarily, and in fact overwhelmingly, for military purposes. I believe that my right hon. Friend made that clear at Question time in reply to Questions. I do not know whether the hon. Member for Aston was present.

Mr. Wyatt: Does that apply to jet propulsion in the civil field as well? Is that all done by private enterprise?

Mr. Low: We do a great deal on jet propulsion, as I have said, but, as far as I am aware, there is also some research on jet propulsion carried out privately by the aircraft industry for themselves.
My hon. Friend the Member for Truro (Mr. G. Wilson) raised once again the important matter of inter-planetary travel. I can add nothing to the excellent and lucid answer given by my right hon. Friend this afternoon. Some important work being done now will help, or might help, us in the future.
Some questions were put to me under Subhead B. 4 in connection with loans in respect of uranium. In reply to the right hon. Gentleman the Member for Dundee, West (Mr. Strachey), these loans are loans made to individual companies. They are

carefully scrutinised under a scheme which was started under the previous Government. I believe that the scheme was sanctioned in November, 1949. It allows for agreed proportions of loans to these companies between ourselves and the United States Government.
The terms of repayment which were fixed then are applied in the same way to the loans that are covered by this Supplementary Estimate. These loans are made to individual companies because this uranium production is not part of their normal business. Slightly different considerations apply in the case of the loans in Australia, but the same scheme is being followed.
4.45 p.m.
Then there were questions put to me under Subhead E in connection with transportation. The right hon. Gentleman the Member for Dundee, West asked why it was that this sum had not been foreseen. I am afraid that it is a fact that a large load in connection with the picrite importation to which my right hon. Friend referred was not foreseen, and this covers the main bulk of the Supplementary Estimate. It is slightly over £800,000. As I think my right hon. Friend said, the rest is mainly taken up in shipments of supplies to the Middle East and Malaya.
My hon. and gallant Friend the Member for Angus, South (Captain Duncan) asked whether there might be some confusion between us and the War Office in this matter. In the normal way, supplies that pass through the Ministry of Supply Votes are delivered at home, but part of this Supplementary Estimate covers certain supplies that were ordered, I believe under the previous Government. from Europe and were delivered direct from Europe to the Middle East or the Far East. The transportation costs are met under Subhead E of this Vote. We recover from the War Office under Subhead Z. 8 of this Vote, and I expect that the War Office, in order to pay the Ministry of Supply, have to include it in their Vote.
I was also asked questions on matters arising under Subhead G. 1. The hon. Member for Newton (Mr. Lee) talked about the siting of factories. I think that my right hon. Friend made it clear that the bulk of the expenditure here was in connection with the Ministry of Supply research and development establishments.


There is one factory to which he referred—an agency factory—and that is sited, as agency factories sometimes are best sited, alongside the parent factory. So I do not think that the considerations to which the hon. Member for Newton referred arise here.
The hon. Member for Fulham, East asked whether this Supplementary Estimate represented mainly higher costs or more work being done. Under this Vote, it is a fact that more work is being done. There has been some increase in cost, in particular in connection with the factory to which my right hon. Friend referred. I can best answer the hon. Member's question about higher costs by referring to Subhead B. 3, which relates to research and development by industry, extra-mural research at the universities, and so on.
I cannot give general figures for higher costs under the whole of this Vote I, but under Subhead B. 3. I can tell the Committee that higher costs account for slightly over £3 million of the additional sum required of £9,900,000 out of a total of £62 million.
I think that I have covered the main points that have been made. I am sorry that we were not able to hear all the searching questions of the hon. Member for South Ayrshire. I think that he was prevented from putting some of them by the rules of order.

Mr. Patrick Maitland: Could my hon. Friend deal with the question that I put to him, namely, the extent, if any, to which this expenditure under B. 3 is attributable to the refusal of the United States to share the secrets of atomic energy with this country?

Mr. Low: I am sorry I did not refer to my hon. Friend's question. It is, of course, an important question, but I think the relations between this country and the United States are outside the terms of the Supplementary Estimate.

Mr. Ede: I wonder whether the Parliamentary Secretary could make a little more definite one of the statements that was made by his right hon. Friend. I do not know that we have so far obtained any more definiteness from the hon. Member's reply. In fact, those things which were indefinite

before have become rather more hazy as a result of his intervention.
I am old enough to remember the time when Jules Verne's book "Round the World in Eighty Days" was regarded as a demonstration not merely of the improbable but of the impossible. When I hear people laughing today at references to the possible speed and distance that we may attain in the future, I remember that in one comparatively short lifetime one has reached the stage when any boy offered that book today would regard it as an insult to his knowledge of the speed which can be attained in the world.
The right hon. Gentleman said, I think, that supersonic weapons now travelled at several times the speed of sound. I think he used the word "several." That is about the kind of mathematical term that the Parliamentary Secretary is very adept at using, but it does not help us very much, because "several" is a somewhat vague and elastic term. I do not know whether the hon. Gentleman feels that he could help us by giving a sort of minimum firm number that we could insert for the word "several" and still not reveal anything that would endanger our security.
The speed of sound, as far as I can calculate it—in one interpolation I have been confirmed by my right hon. Friend the Member for Ipswich (Mr. Stokes), who knows it by heart; I had to work it out—is 765 miles an hour—or just under 13 miles a minute. That sounds a pretty terrific speed, but I wonder if we could be given some indication of the sort of minimum that we have reached in this field.

Mr. Sandys: That expression was carefully chosen in order to be deliberately vague, and I am glad that it has succeeded. As to the speed of sound, I think the right hon. Gentleman is not entirely correct. When I give the correct information I think he will find that the statement I made was even vaguer than he thought. The speed of sound varies according to height and I believe also according to temperature.

Mr. Ralph Assheton: I do not feel that we ought to let this Supplementary Estimate go without calling the attention of the Committee to the fact that the Ministry of Supply and


the Ministry of Materials alone are today coming to us for £100 million extra. The explanations which have been given by the Minister may very well satisfy the Committee, and they may well think it appropriate that the Supplementary Estimate should be granted, but it is a very impressive sum of money to be requested as a Supplementary Estimate for these two Departments.
Although I do not expect a reply to this point, I should like to stress what was said by the hon. Member for Lanark (Mr. Patrick Maitland), namely, the importance of our co-operation with the United States in trying to reduce the enormous cost of the development of atomic energy in the two countries. I cannot imagine any more beneficent result of conversations with the United States than that, and I hope the Minister will take account of that point.

Question put, and agreed to.

Resolved,

That a Supplementary sum, not exceeding £16,000,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the salaries and expenses of the Ministry of Supply for the administration of supply (including research and development, inspection, storage, disposal and capital and ancillary services related thereto); for the supply of atomic energy and radioactive substances; for administrative services in connection with the iron and steel, non-ferrous and light metals and engineering industries; and for miscellaneous services.

CLASS IX. VOTE 2

Ministry of Supply (Assistance to Industry, Scrap Recovery, &c.)

Motion made, and Question proposed:
That a Supplementary sum, not exceeding £5,750,010, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Supply on assistance to industry, scrap metal recovery, trading services, and iron and steel war terminal services.

Mr. Sandys: I do not imagine that the Committee will wish to debate this Supplementary Estimate at any length. I am glad to assure my right hon. Friend the Member for Blackburn, West (Mr. Assheton)—and this applies to a number of other items in these Supplementary Estimates—that this involves no charge whatsoever upon the Exchequer, but consists purely of a book-keeping transaction

between two Exchequer accounts. I shall be only too glad to answer any points which hon. Members may wish to raise.

Mr. Lee: I should like to ask the Minister a question relating to scrap metal recovery and so on. I should like to know whether any of this money has been expended in the development of substitutes for steel for the manufacture of products in which steel has normally been used. The Committee will, no doubt, agree that especially during periods of acute steel shortages industry adapted itself to the use of substitute forms of steel, and indeed in very many instances those substitutes will continue to be used. In other words, the nature of much of our industry is now changing. I should like to know whether there is envisaged in this Vote the expenditure of money in the development of and experiment with plastics and new types of minerals in place of steel.

Mr. Sandys: This Vote has nothing to do with development work of any kind. Subhead A is concerned with import duties on iron and steel, and Subhead B is a token sum of £10 for accounting purposes.

Mr. Lee: But under the Supplementary Estimate the purposes for which this money is being asked are "assistance to industry, scrap recovery, &c." I am asking whether the Ministry are doing anything to develop the use of substitutes for steel.

Mr. Sandys: I am sorry to interrupt, but if the hon. Gentleman will read page 10 he will see under Subhead A that this Supplementary Estimate, as distinct from the main Estimate, is entirely concerned with the refund of Import Duty which is payable to the Board of Customs.

Mr. Lee: I am grateful to the Minister for pointing that out. I do not know whether I am in order in asking whether there is contained in the Supplementary Estimate any provision for the development of the type of thing which I was outlining to be used in substitution for steel.

The Deputy-Chairman (Mr. Hopkin Morris): The hon. Member would not be in order in asking that.

Question put, and agreed to.

Resolved,

That a Supplementary sum, not exceeding £5,750,010, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Supply on assistance to industry, scrap metal recovery, trading services, and iron and steel war terminal services.

CLASS IX, VOTE 3

Ministry of Supply (Purchasing (Repayment) Services)

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £23,299,900, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Supply on the supply of munitions, aircraft, electronics equipment, common-user and other articles for the Government service, and on miscellaneous supply.

5.0 p.m.

Mr. Sandys: This is the first year that this Vote has been shown separately. It constitutes the account out of which the Ministry of Supply pays for all the purchases it makes from industry and from the Royal Ordnance Factories on behalf of the Services and other customers. This is also the account into which we pay money received by way of repayment from our customers. Since we charge our customers the same price as we pay to the manufacturers, without adding anything for administrative costs, the outgoings and the receipts in this account must, over a period, cancel each other out.
But the account cannot be expected to balance exactly in any one financial year. The reason is that we have to make substantial progress payments to the manufacturers, particularly on orders which take a long time to execute, such as aircraft and tanks. On the other hand, we ourselves are not reimbursed until we have delivered the finished product. It must, therefore, be accepted that this account will usually show a discrepancy one way or the other in any single year.
For the purposes of our original Estimate we made an assumption—and it was no more than an assumption—that expenditure and receipts would each amount to about £528 million. In fact, expenditure is likely to be about 2.3 per cent. above that figure and receipts are likely to be about 2.1 per cent. below it.

If hon. Members will look at page 12 of the Supplementary Estimate they will see that the largest single increase in expenditure, which amounts to about 7 per cent., is in respect of aircraft and ancillary equipment. This is due largely to the acceleration of the work on the super-priority types, which has resulted in the manufacturers asking for progress payments earlier than would otherwise have been the case.
The increased progress payments which, owing to the acceleration of the programme, we are making this year instead of next year—I would draw the attention of my right hon. Friend the Member for Blackburn, West (Mr. Assheton) to this point—involve a Supplementary Estimate this year; but they will to that extent reduce the amount to be paid to manufacturers in subsequent years. The whole of this Supplementary Estimate should not, therefore, be regarded as an additon to the defence bill.
The other item on which there has been a substantial increase in expenditure —and particulars of this will also be found on page 12—is clothing and textiles. Here our revised estimate is about £12½ million above the original estimate. Ten million pounds of this will be recovered during the present financial year from the Services and other customer Departments; this sum is included lower down on the same page, under the heading "Repayments by customers, &c." This increased expenditure on clothing and textiles is due to the extensive relief orders which the Government decided to place, and which were fully debated many months ago, in order to assist the areas which were hardest hit by the recession in the textile industry. Nearly £21 million worth of additional textile orders have been placed under this relief scheme. Nearly £19 million of this was placed by the Ministry of Supply and the balance by the Admiralty.
I should explain to the Committee why only £12½ million and not the full £19 million appears as an excess expenditure in this Supplementary Estimate. There are two reasons. The first is that a proportion of these relief orders—though not a very large proportion—will not be, delivered until after the end of the present financial year and is therefore not shown in this account. The second


reason is that our normal programme of textile purchases cost us less this year than we had estimated, because of the general decline in prices of textiles.
I should also point out, in another connection, that the short-fall in receipts on page 12 includes refunds—and I would again draw the attention of my right hon. Friend the Member for Blackburn, West to this—amounting in all to £9 million—which we have paid back to the Service Departments in respect of under-deliveries during the financial year 1951–52 for which, on the best information that was then available, payment had been allowed in the usual bulk settlement last January. Corresponding sums are credited to the customer Departments. Therefore, nearly half this Supplementary Estimate involves no charge on the Exchequer. I hope that this information will be sufficient to enable the Committee to approve this Supplementary Estimate.

Mr. Strachey: The Minister has given us an explanation of what, at first sight, I am bound to say is the rather odd little sum which is to be found upon page 11 of the Supplementary Estimate. I would draw the attention of the Committee to that sum. They will see that the purchases of the Ministry of Supply are shown as £540 million and it has been paid £516,700.000. Then it says that the net excess of payments over receipts amounts to £23,300,000 and there is a deduction of £100 in respect of the provision in the original Estimate. This gives a net deficit of £23,299,900, which we are asked to meet.
That little sum is explained, no doubt, as the Minister has just told us, by the fact that it has increased its ordering of stuff from the industry, while its customers, above all the War Office and the Air Ministry, have apparently not accelerated their purchases from the Ministry of Supply. The rate of delivery to the Services has not gone up in proportion to the rise of orders to industry. That is a quite understandable thing to have happened and it is reflected in the Estimate for my old Department, the War Office, which we shall be considering later. Looking at that, I note that at one point the delivery of warlike stores has run some £13 million below the Estimate. I imagine the two sums are connected.

Mr. Low: May I draw the right hon. Gentleman's attention to the fact that under repayment under (2,b) the War Office revised Estimate is £11 million up?

Mr. Strachey: I suppose that is because non-warlike stores, textiles and the rest, are up, and that the actual warlike stores are down. However, I do not think, Mr. Hopkin Morris, you will allow us to go very far on that. We shall come to it later on, no doubt.
All this is quite explicable and understandable, but what I think we on this side of the Committee are concerned with is, how does that kind of situation square with the Prime Minister's repeated statements that re-armament was being drawn over a large number of years? This stocking up, as it were, which is apparent from these figures, is an increase of stuff in the pipeline—and the Ministry of Supply is in this connection a pipeline—and would surely be consistent with an increase in the programme itself—what one would expect to see if the re-armament programme were being increased. That would mean a sudden freshet of new orders to industry which would not be reflected for a time in deliveries to the Services, but it certainly seems directly inconsistent with the stretching out of the programme over more years.
It is, therefore, very difficult to see how this quite heavy increase in investment in working capital—because that is what it is, surely—is consistent with a stretching out of the programme—it may be right or wrong; I have considerable sympathy with it myself—over a greater number of years. Perhaps, whoever is to reply to the debate would tell us how that has come about, because this Estimate here is, surely, in itself substantial—£23 million. Although I quite agree myself that it will not mean in the end any increase in itself in public money actually expended, it does give every indication of an increase and acceleration of the re-armament programme instead of the reverse. I think that is the main thing which must concern us today.

Mr. Lee: I was interested in the points made by the Minister on the question of the bringing forward of orders from the textile industries, and the effect upon the


industries of that operation. The right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) and I had an interesting discussion on it a few weeks ago, and I have no doubt he is as interested in it as I am now. The £19 million of orders that the Minister of Supply placed at that time undoubtedly had a very good effect upon the levels of employment in the textile industry, and I applaud the action. I should like to know, if possible, a bit more about this, and I hope I shall have better luck this time than I had on the last occasion when I asked some questions.
I wonder whether the right hon. Gentleman could tell us what percentages, roughly, of these orders have now been fulfilled, and if he could tell us also, perhaps, it would be of interest if he could say what amount of orders still remains to be placed with the textile industry. It is extremely important to us that we should know about the progress of those orders which have been placed, because if we can know that there is still a substantial amount of this £19 million worth still to be placed we can feel more comfortable than some of us are feeling at the moment as to the possibility of a continuation of a high standard of employment in the textile industry.
5.15 p.m.
I recall some months ago an announcement by certainly one of the Ministers, I think by the President of the Board of Trade, that there were still pretty substantial orders which the Government had in mind for textiles, for uniforms and so on, which had not as yet been placed. I am wondering how that position now stands in view of the Prime Minister's announcement as to the lengthening out of the process of rearmament.
It would be of great interest to Lancashire if we could know whether it was considered by the Government as being necessary for them now either to reduce the global figure they themselves had in mind or to lengthen out the process of placing those orders because of the Government action on the general question of the re-armament programme. If the Parliamentary Secretary could tell us of the progress that has been made with the present orders, whether there is still a substantial amount to be done,

and, second, what is the amount which the Minister of Supply still has to place with the textile industries, I am sure that, so far as we are concerned in Lancashire, we should have a better picture of what the future offers to us.

Mr. Assheton: Like the hon. Gentleman the Member for Newton (Mr. Lee), I naturally take a great interest in the subject which he has raised. Lancashire is, of course, most grateful for the help it has received from the Service Departments in the difficult year through which we have just passed. I have the greatest possible respect for the Minister of Supply, and I admire very much the ingenuity of his answers to questions on these Supplementary Estimates.
I must, however, draw the attention of the Committee to this salient fact, that although it may well be that the total of the Supplementary Estimate for purchases is only £12 million higher and that of repayment by customers is considerably lower, the consequences which one would expect to follow from that are not quite so simple as one would expect. One would expect the consequence of that to be that the expenditure by the War Office, for example, this year would have been considerably less, but we have a Supplementary Estimate by the War Office for £35 million, and so we have to watch these things very carefully indeed.
In the old days, when the War Office and the Ministry of Supply were combined in one organisation, it was not so easy to pass the buck in dealing with Supplementary Estimates as it has become under the new system. None the less, I do appreciate the answers which the Minister has given, and certainly I have no further criticisms to offer of the Estimates at the present juncture.

Mr. Wyatt: I wonder if the Minister who replies would explain to us the real significance of this variation between the Estimate and the Supplementary Estimate. Whereas guns and small arms exceed the Estimate by £2 million, ammunition and explosives are down by £3 million below the original Estimate; engineers' equipment is down by £4,400,000; and mechanical transport is down by £14 million. "Mechanical transport," in particular, I imagine includes the new programme for the Army for the type of four-by-four vehicles throughout the


Army of a standard type—all that kind of thing, the orders for which, I hear, are being cancelled at the moment. It would seem from that that there is a move away from the more conventional types of weapons in the re-armament programme, and from the sort of provisions we have been accustomed to in the past, and an emphasis on the creation of new types of weapons. On page 12 we see some increases in the Estimates for aircraft—for airframes and aero-engines—an increased sum of £10,500,000.
Does it mean that in general the rearmament programme should, in the minds of the Government, be directed towards trying to produce new weapons of a kind we have so far not used; rather postponing the creation of the divisions we have been anticipating—giving them up-to-date equipment, and so on—in favour of trying to develop new weapons for some years ahead and not for immediate use?

Mr. A. J. Champion: I wish to ask a question arising out of the figure of £19 million for textiles. In addition to the information asked for by my hon. Friend in connection with the amount spent on textiles, I should like to know how much of the amount will be spent in buying the products of the rayon industry. There may be some difficulty about specifications, but I should be very grateful if the Parliamentary Secretary could tell us whether they are now satisfied with the specifications put in by the industry, and how much of the amount to be spent in the current year will be spent with the rayon section of the textile industry.

Mr. M. Stewart: I do not believe that this Supplementary Estimate is a financial matter in the strict sense of the term. That is to say, we are not really discussing a sum of £23 million which will fall on the taxpayer in addition to what was previously expected. If what is happening here does at any time mean more expenditure by the taxpayer, it would not necessarily be the figure of £23 million. These figures are interesting because they are a sort of mirror of how certain parts of the defence programme are going.
The Minister, introducing the Supplementary Estimate, said by way of explanation that the increase of £12 million

in the sum spent on purchases represented, in many cases, progress payments on pieces of work that were being done, whereas on the other hand the sums coming in are what are paid by the customer departments, presumably when the job is completed and the articles, whatever they are, are in the hands of the Ministry absorbing them.
If we notice then, as we do, that the payment out for purchases is up about £12 million and the receipts from customers are down, does it mean, at any rate as far as some of these items are concerned, that we are expanding the demand made on industry to produce more of certain things—more clothing and textiles, for example—but that the actual amount of stuff completed and delivered, and therefore paid for by the customer Departments, has been less than was anticipated earlier in the financial year? If that is so, it would mean that we are casting rather more bread on the waters and it is taking a rather longer number of days to return to us. Does it mean that in some instances orders have not been completed as speedily as was expected?
In the carrying through of a great rearmament programme it is extremely difficult to be anything like certain that this, that or the other article of war-like stores will be completed at the date originally anticipated. Even if the greatest care and forethought is exercised difficulties are always likely to crop up which cause production of the article, whatever it may be, to take longer than was originally expected. Sometimes it is found necessary to make alterations in design on the way. That sort of thing would, I think, lead to larger progress payments at the time, and to a delaying of the time when the customer Department would pay for the article. That seems to be the result we have got in this Supplementary Estimate.
Are we correct in supposing, as would appear reasonable at first sight, that this Supplementary Estimate means that, at any rate on some items, there has been a short-fall on deliveries? Does that indicate any serious check to such progress in the defence programme as the Government had hoped to make some months ago when the original Estimate was put before us? I hope that in that connection the Parliamentary Secretary will be able to reply to the very interesting point


made by my hon. Friend the Member for Aston (Mr. Wyatt) who drew our attention to the way in which the Estimate has altered on the certain items in subparagraph (1) on page 12, and suggested that that indicated a general trend of policy on defence.
I hope he will also reply to the interesting point raised earlier, which was reiterated on this Supplementary Estimate by my right hon. Friend the Member for Dundee (Mr. Strachey), namely: How do we fit in what is happening in these Supplementary Estimates, these additional sums of money which we are asked to vote, with the general statement by the Prime Minister of a slowing down of the defence programme? I give the Parliamentary Secretary at once that the two statements are not necessarily contradictory, but I think he will agree that they do need some degree of explanation, which I hope he will give to us. There is a small point, which I admit I ought to understand but which I am afraid I do not understand, namely, the item of £500,100 for "Exchequer Extra Receipts" at the end of sub-paragraph (2) on page 12. Perhaps the hon. Gentleman will tell us what that item means.

Mr. Low: The right hon. Member for Dundee (Mr. Strachey) raised the general question to which his hon. Friend the Member for Fulham, East (Mr. M. Stewart) has just referred, asking us to explain, first, why there was this inaccuracy, and secondly, how this fits in with the statements that have been made about the defence programme. Perhaps I ought to explain at once for the benefit of the right hon. Gentleman that the increase in the payments for purchases does not indicate, as it were, a stocking up. As my right hon. Friend showed, it is due in the main to the increase in progress payments, which is a different thing.
I am sure the right hon. Gentleman will realise that it is very difficult to be accurate to the nearest £ on expenditure amounting in all to £528 million over 12 months. The hon. Member for Fulham, East, who was Under-Secretary of State for War and later Parliamentary Secretary to the Ministry of Supply, quite rightly reminded the Committee that estimates on programmes such as this are rarely, if ever, accurately made. Indeed, I think I remember the hon. Gentleman

making that plain in a debate in July, 1951. It is true that until a programme such as this defence programme reaches its peak payments for purchases and progress payments are bound to exceed over the year the repayments by customers for the very reason that they include these progress payments.
On the point about how these figures fit in with the general defence policy I ought to sound a note of warning, at any rate for the benefit of the hon. Member for Aston (Mr. Wyatt). Too much should not be read into these figures. I think I ought also to remind the House that my right hon. Friend the Prime Minister, in his statement about the defence programme, said that there would be acceleration in the super-priority types. There has been a hastening in the super-priority types, and that shows its mark in the expenditure on progress payments under the purchases in sub-paragraph (1).

5.30 p.m.

Mr. Wyatt: The hon. Gentleman did not say that there was going to be a slowing down in the non-super priority types. That seems to have taken place.

Mr. Low: I think that the best way of getting some idea of what is happening from these figures is to take the repayments by customers, and to have in mind the point made by my right hon. Friend, that the figure of £516,700,000 which is the total repayment by customers under the revised Estimate, would have been £9 million extra but for certain refunds that we had to make to Service Departments in respect of over-payments for previous years. If the hon. Gentleman compares that figure with the £528 million, I do not think that he will be unduly alarmed.

Mr. Lee: The hon. Gentleman has pointed out that the programme has become a little distorted by super priorities and so on. His right hon. Friend spoke a minute or two ago about rockets. Is the rocket in the super priority class?

Mr. Low: Guided rockets were in the super priority class from the very start.
The other general heading under which questions have been put to me was textiles. Here I can answer one question absolutely precisely. There are no more orders to be placed under the textile relief scheme; they have all been placed.


They were placed as soon as we possibly could place them, because the object of the scheme was to help Lancashire and other textile areas which were affected for reasons of which the Committee are well aware. The last substantial order was in fact placed several months ago.
The hon. Member for Derbyshire, South-East (Mr. Champion) asked me a question about rayon. As, I think, he knows, I take a special interest in that matter, but I am afraid that I have not the exact figures at my finger tips. I will gladly send them to him.
In general, the main part of the rayon orders that we hope to be able to place, were placed. There was, however, a difficulty over sheets, which did not stand up to the tests, but we have not given up hope about them. There are other tests going on and further attempts to find a better specification, and we will see if we cannot solve that difficulty later. As I say, I will send the hon. Gentleman the exact figures at a later date. I think that covers all the points which have been made, and I hope that the Committee will approve the Supplementary Estimate.

Mr. Lee: I am grateful to the hon. Gentleman, although I do not like the information he has given me, for explaining the position. Can he give me an answer to the other question which I asked? To what degree do we now stand so far as the fulfilment of the orders which have been placed is concerned? That is a most important issue to us. If he can during this discussion give me the answer, I shall be most grateful.

Mr. Low: I am afraid that I cannot give the hon. Gentleman a definite answer on that last point. There are still two months to go in the financial year, and, of course, the money provided for in the Supplementary Estimate covers not only the textile relief scheme but the normal textile orders, and we have had for this purpose to group them together. I think that I should be misleading the Committee if I tried to make a guess as to the value of the orders under the textile relief scheme that will be completed. The majority of them will be completed. I do not want to depress the hon. Gentleman too much. When I said that no further orders were to be placed, I was referring to the textile relief scheme.

Mr. M. Stewart: I do not think that the hon. Gentleman answered the point about the extra Exchequer receipts.

Question put, and agreed to.

Resolved,

That a Supplementary sum, not exceeding £23,299,900, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Supply on the supply of munitions, aircraft, electronics equipment, common-user and other articles for the Government service, and on miscellaneous supply.

CLASS IX. VOTE 4

Royal Ordnance Factories

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £2,600,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the expenses of operating the Royal Ordnance Factories.

Mr. Low: This Supplementary Estimate amounts to £2,600,000 for Royal Ordnance Factories and arises from a reduction in the total value of supplies which the factories expect to deliver to their customers during this financial year and therefore in their anticipated receipts.
As the Committee will see, there is on the other side of the account, as it were, an increase of £1½ million under Subhead A—"Current Expenditure"—which is more than offset by the substantial reduction under Subheads C and D for capital expenditure. If hon. Members will turn to the Appendix on page 15 which sets out the R.O.F. expenditure Estimates, and reconciles them with the revised cash Estimate, they will see that the increase in stocks and work in progress is now estimated at over £4½ million, compared with £2¼ in the Estimate.
This does not mean that there have been delays in programmed production or that there has been inefficiency. In general, the Royal Ordnance Factories will by the end of this year have met all the orders placed with them for Service customers. The work in progress is greater than anticipated, mainly because the nature of the work being done in the factories has been slightly different from that anticipated when the original estimate was made.
The value of the factory product, excluding capital expenditure, but including the increase in work in progress


and stocks, is approximately the same as that originally estimated. Hon. Members will find that that is so if they compare this with a similar Appendix on page 50, line 9, of the Civil Estimates. Why then has current expenditure increased?
The three reasons for the increase under Subhead A are referred to on page 14 of the Supplementary Estimate. The Estimate assumed an average strength of 7,275 non-industrial staff to which "salaries" referred. That will be found under Subhead A, paragraph 1. In fact, the average strength for the year will be 7,384, an average increase over the year of 109. I think that an average increase spread out over the year is the only way in which the Supplementary Estimate can be reasonably drawn.
I ought to explain the difference between 109 and 325. The figure of 325 is the maximum increase of staff during the whole year, but the average increase above the estimated average number of staff is 109.

Mr. R. R. Stokes: May I understand what that means? I have never heard this put in that way before. It does not make any business sense of any kind, although it may have a Civil Service sense.

Mr. Low: I am sorry if this does not make any sense to the right hon. Gentleman, but it certainly makes sense to me, and I will attempt to explain the position to him.
The Estimate was drawn on the basis of what 7,275 persons would cost in salaries. It has been found in actual fact, taking it over the whole year, that the total numbers would be the equivalent of 109 more persons in posts during the whole year. It is the only way of doing the sum. There were on average 109 more persons in posts during the whole year, and that will cost part of the £125,000 additional for which we are asking.

Mr. Stokes: rose—

Mr. Low: If the right hon. Gentleman will wait a bit I will explain where the other part of that sum comes in. It was not found practicable to keep the level of 7,275 and to do the work required. The non-industrial staff in the Royal Ordnance Factories includes foremen,

engineers and chemists as well as clerks, accountants, managers and superintendents. In addition to the small increase in their numbers, experience has shown that there was a slight under estimate in their average rates of pay and £125,000 under this Subhead will cover both those points.

Mr. Stokes: May I now try to understand the position? Are there 325 bodies only or an average of 109, whatever that means?

Mr. Low: By referring back to the original Estimate I think we can understand the position. The greatest number of salaried staffs that there have been in the ordnance factories is 325 more than the figure at the beginning of the year. That is, the figure given in the original Estimate, but this maximum figure was not reached on the first day of the year, and, therefore, it is not in operation during the whole of the 12 months. Is the right hon. Gentleman now satisfied?

Mr. M. Stewart: What I do not understand is why the 109 is brought in. Was it to make it more difficult?

Mr. Low: Just to make it more truthful.

Mr. Stokes: It does not make sense.

Mr. Low: I am very sorry that the right hon. Gentleman is unable to follow it. At least his hon. Friend is able to follow that it makes sense though he does not agree that it was the right thing to do. After this slight interlude we might now pass on to the next Subhead, which is "wages" and for which there is also additional provision.
The additional provision for wages is due partly to an increase in average earnings over the year and partly to the engineering wage award of last November. That engineering wage award accounts for £274,000 out of the £760,000. The addition is not due to an increased number of men employed and, therefore, I have to explain the figures on the paper. They indicate that there are 4,500 additional staff. That means that at the peak period during the year there will have been 4,500 more industrial staff in the Royal Ordnance
Factories than there were at the beginning of the year.
The original Estimate in providing for wages of nearly £18 million assumes an average strength over the year of 43,000 industrial staff in the Royal Ordnance Factories. Here again we meet with this average. The average is likely to be 41,060. In short it can be stated that the day's earnings per man are above the estimate and not the number of men.

Mr. Stokes: Would the Minister agree that if the average went the same way as it did in A. 1 then the average would be 1,500 and not 41,600? It does not make any sense any way.

5.45 p.m.

Mr. Low: Without being discourteous to the right hon. Gentleman, I am bound to disagree with his last observation. The average did not go the same way as in subhead (1); it went in exactly the opposite way.
Under subhead (3) the current expenditure as originally estimated was just over £24 million, and we are asking for an additional £575,000 of which £245,000 is for materials and the rest for increases in running costs such as expenditure on utility services—heat, light, power and so on—and on internal transport. It will be appreciated that this increase amounts to about 2¼ per cent. of the original Estimate under this part of the subhead.
I might I think to draw the Committee's attention to the fact that the Supplementary Estimate would have been £900,000 higher but for the fact that there was an increase in miscellaneous receipts under Z. 3. This increase is largely due to a very successful scrap drive in the Royal Ordnance factories, particularly at Woolwich, and receipts for scrap will amount to £1,600,000 instead of the original estimate of £950,000.
I will gladly try to answer any questions that arise out of the Estimates.

Mr. Strachey: I do not think any of us envy the task which fell to the lot of the Parliamentary Secretary in explaining that part of the Estimates to us. I recollect that before the war there was a German philosopher who invented the philosophy: "as if," but I did not think that that philosophy would be introduced in the Supplementary Estimates from the Ministry of Supply. As I understood it, what the Parliamentary Secretary was attempting to say was that these Estimates were as if there had been, for example, an

average of 109 more salaried staff in the Ordnance Departments over the year. Quite why he had to present it to the Committee in that way I do not know, but he said that their wages were partly increased by more staff and partly increased through additional earnings.
The other thing that emerged from what he told us was the same as emerged from the last subject which we considered, that despite all we hear about our re-armament programme being stretched out at present, it is accelerating in what I venture to call a form of stocking up, and I do not mean the accumulation of physical stocks of finished goods. I agree with the Parliamentary Secretary that that is not what is happening, but we are stocking up in the sense of increasing the work in progress all along the line. Working capital has been increased, and that working capital represents costs and materials in various stages of progress.
It is a significant fact which the Committee ought to take note of, that this process is still going on. It goes on in any re-armament programme in the course of its development, but we find that it is going on faster than was estimated a year ago. It is still accelerating more rapidly than was expected a year ago, and that means that in physical terms of work in progress the re-armament programme, after all that has been said about it, has not yet reached its peak. That must mean that the strain of the programme has not reached its peak, and any deviation which we may get from the Prime Minister's announcement of stretching the programme out is for the future and cannot refer to what is happening here and now or in the coming year. These figures refer to the coming year, and that is a rather serious consideration which the nation has got to face.
The only other point I want to take up is that these figures seem to suggest a shift in the character of the programme from conventional weapons to some kind of futuristic weapon which has been given super-priority of one sort or another; that is to say, from such things as guns, tanks, vehicles and the like, to things like guided missiles, rockets and new types of aircraft. It is expected that the figures should show that shift, but it is something of which the Committee should take careful note.
I am disposed to question the wisdom of it. It seems arguable that the most important thing which this country should be doing at the moment is seeing that the maximum possible number of divisions with the very best equipment is available on the Continent of Europe, and that, important as guided missiles and such things are, the shift of emphasis that comes out—the Minister shakes his head. There must surely be some shift of emphasis in the figures. They all point in that direction. Indeed, it has been announced, and the Minister spoke of it himself by saying that concentration on the super-priority type of weapon was indispensable. To some extent it obviously is, but the Committee, and the House of Commons when it considers the matter, ought to take that point into account.

Sir Ian Orr-Ewing: I have one or two questions to put on this aspect of the Supplementary Estimates. There is an increase of about £4½ million shown in regard to aircraft. Is that increase due to late stage alterations in design, alterations which might or might not have been devised at some earlier stage? If the Parliamentary Secretary would turn to the Report of the Select Committee on Estimates on that particular point he will see that we did attach considerable importance to the blending in of modern design with production.
The next point to which I would refer is the saving on plant and machinery of some £l¼ million. Could the Parliamentary Secretary tell us something about that? Those of us who have experience in looking at the plant in Royal Ordnance Factories are somewhat concerned whether that plant is being kept quite as up to date as it should be. The nature of the work done on the existing plant is brilliant, but it is not fair to expect to produce the best results unless the machinery is the best available in the country. I am glad to see any economies made, but the particular economy to which I am now referring may not in the long run be entirely sound.
Directly connected with that economy, it may well be, is the item set out on the paper—however it may be explained —of increases for the salaried staff, which the right hon. Gentleman opposite frankly

could not understand, and an increase of wages for an additional staff of 4,500 at increased rates. My hon. Friend the Parliamentary Secretary has attempted to tell us that that was not what was meant, but that in fact is what is being brought before the Committee. The words are:
wages of additional 4,500 staff and for increased rates.
There are two distinct points. If that does not mean wages for an additional 4,500 staff those words should very definitely be placed before us and we should be told that they should not be on this paper at all. If my hon. Friend the Parliamentary Secretary wants to interrupt me on that point I shall be very glad to give way while he does so.

Mr. Low: I am afraid that I was not quite as clear as I thought. If my hon. Friend is reading into the words on the paper that there has been an increase of 4,500 over the staff covered by the Estimates, he is not reading the words correctly.

Sir I. Orr-Ewing: I am sorry, but I simply cannot read any other meaning into the words as they appear on the paper. I do not doubt that my hon. Friend is weighing his words here, but we must accept it that the Committee are considering something rather different from what is set out on the paper. I hope we are. As the words are set out, they clearly mean that there has been a quite considerable reduction of expenditure on machinery and plant, related to additional labour involved. That is one of the points where we may get false economy. I hope that before we come to the end of our consideration of this Supplementary Estimate we may get some of the information which is behind these figures.
It seemed to us on the Select Committee that there was a very considerable waste of public money—those are the actual words which we used in our recommendation—in regard to inspectors. It appeared to us that something was creeping into the system leading to a considerable amount of confusion if not to a sense of frustration among a very important class of workers in the Royal Ordnance Factories, and, of course, to an increased loss of production arising from the frustration. Can my hon. Friend tell us whether the committee of inquiry have


reported on the question of inspectors? I should not like to think that any of the additional sum which we are asked to vote now will be used wastefully, while public money is not being expended as carefully as it might be as a result of this out-of-balance picture.

Mr. Christopher Mayhew: Before we decide on this Supplementary Estimate in regard to the Royal Ordnance Factories I should like to put one or two questions to the Minister about the working of the Woolwich R.O.F.
It is obviously not the time now, for several reasons, to ask a Minister for a statement on the future of Woolwich Arsenal in particular because there are no fewer than three inquiries now going on into the question. There is the inquiry being made by the Board of Management of the Royal Ordnance factories. There is the inquiry which, I think, all concerned welcome which will be made by the Inter-Departmental Committee recently set up by the Minister of Supply, and there is the study that is being made by the combined shop stewards' committee and staff side at Woolwich Arsenal in conjunction with hon. Members of both parties who represent neighbouring constituencies.
6.0 p.m.
I am not asking the Parliamentary Secretary for a general statement on Woolwich Arsenal, but I want to put to him one or two points. Although nobody, least of all Woolwich people, pretend that all is well with the working of the Arsenal at present, some of the newspaper accounts of what is in the Report of the Select Committee have been regrettably inaccurate and unfair to the people working there. For example, the Select Committee did not describe Woolwich Arsenal as a white elephant. On page XIV of the Report they say:
Your Committee conclude that the Arsenal was regarded by the Ministry as something of a white elephant.
That is a very different thing, and I ask the Minister to deny that this is how he or his Ministry regard the Arsenal. It seems clear to me that even if the Ministry sometimes seem to treat the Arsenal as a poor relation, it in no sense regards it as a white elephant, so perhaps the Minister will take this opportunity of confirming my view?

Mr. Cyril Osborne: Can the right hon. Gentleman say what is the difference between a "white elephant" and "something of a white elephant"? Surely it is only a matter of degree?

Mr. Mayhew: No, the point is this—

The Chairman: Order. We are discussing now the supplementary sum that is asked for. The original policy has been settled. Whether it is a white elephant or not does not arise.

Mr. Mayhew: I appreciate that, Sir Charles, but I think you will agree that the paper before us raises the question of the working of the Royal Ordnance Factories and in this connection it refers to the lack of supplies for customers, which is one of the main reasons for this Supplementary Estimate. In this connection I wish to refer to the under-employment at the Royal Arsenal at Woolwich, because none of us concerned with this problem denies that action is necessary. For years past the combined shop stewards committee has been pointing out to the Minister the under-employment of Woolwich Arsenal and the fact that it is operating at much below its potential capacity.
For instance, I have here a letter from the secretary of the Woolwich branch of the Associate Blacksmiths Forge and Smithy Workers Society which points out that three shops in the forges are to be closed this month, leaving only one open. Clearly this is bound to result in waste, in excessive overheads and in a number of the criticisms, some of them perfectly justified, made in the Report of the Select Committee. All I am asking the Minister is that when these inquiries are made by his inter-departmental committee, they will include the possibility of a revision of policy by the Ministry regarding orders given to Woolwich Arsenal, possibly involving a closer integration of Woolwich Arsenal with other Royal Ordnance Factories.

The Chairman: That is not what we are discussing. The policy is settled.

Mr. Mayhew: With respect, Sir Charles, I was relating this to the closely related subject of the present working and under-employment of the R.O.F., Woolwich, and it is as a result of the failure of deliveries of the R.O.F.s generally that we are being asked to approve this Supplementary Estimate.
There are one or two other points which in deference to you, Sir Charles, I shall leave to a future occasion. For example, there is the question of the possible concentration of work at the R.O.F.s. That should be studied in the course of the inquiries that are being made, because nobody who has studied this problem can deny that the R.O.F., Woolwich, will be needed by the nation for many years to come. Those who argue that it is vulnerably sited are living in an age when aircraft were guided to their targets by rivers, an age which now no longer exists. Those who argue that some of its machines are obsolete overlook that there are more than 1,000 first-class machine tools less than 10 years old at the Arsenal which could be of the greatest value to the nation at the moment.
I ask the Minister not to make any statement regarding the future of Woolwich Arsenal but to facilitate the enquiries being made by neighbouring Members of Parliament of both parties into this question, and to receive a deputation from us on this subject if that seems desirable. Also, I ask him to make it clear that he has never stated, and does not regard Woolwich Arsenal as a white elephant, and to show that he is aware of the need to make the fullest use in the national interest of the traditional skill, loyalty and public spirit of Woolwich people.

Sir Herbert Williams: I want to ask one or two questions about something which I do not understand. On page 14 there is Subhead Z—"Appropriations in Aid." These arise out of the Royal Ordnance Factories supplying things to the customers of the Ministry of Supply and also to other Supply Establishments. In other words that apparent increase in burden is due to a decrease in burden somewhere else because it means that less work is being done. I have been trying to relate these two items—the £3,600,000 deficiencies in appropriations arising out of supplies to Ministry of Supply customers (Class IX, 3) and the £300,000 supplies to Ministry of Supply Establishments (Class IX, 1). I have been looking at the earlier part of this document to try to find where they appear, but it is not clear. If these appropriations in aid are less merely because

we are spending less, I should be able to find the savings, because this is a book entry between one branch of the Ministry and another. It may be perfectly intelligible but I wish to have some explanation so that I can understand the accountancy method pursued.

Mr. Stokes: It all averages out.

Sir H. Williams: The right hon. Gentleman is getting muddled up with pink elephants. I have no doubt that there is a coherent explanation of this transfer, but I should be grateful to have it.

Mr. Low: Perhaps I might deal at once with the point of my hon. Friend the Member for Croydon, East (Sir H. Williams). It would be easier to understand what happens under Subhead Z (1) if, instead of it reading "Supplies to Ministry of Supply customers (Class IX, 3)" it read "Supplies to Ministry of Supply for its customers." The deficiency there of £3,600,000 is taken into account on page 12—

Sir H. Williams: Where?

Mr. Low: My hon. Friend will appreciate that I cannot break it all down, but he knows approximately what the Royal Ordnance Factories make and if he looks at the Subhead (1, a), he will see a number of items there in which it might be included. "Supplies to Ministry of Supply Establishments (Class IX, 1)" which appears under Subhead Z (2) are paid for under Vote 1, but they do not appear in this Supplementary Estimate. I do not think it would be right for me to go further on that.
The right hon. Gentleman the Member for Dundee, West (Mr. Strachey) argued that we are reducing the everyday equipment of the Forces and increasing their special equipment. There is no need for me to restate what has been said by my right hon. Friend or by the Prime Minister on this matter, but I ask the right hon. Gentleman not to read too much into the figures here and certainly not to read them wrongly. He will, I think, recollect that in 1951–52 the production of the Royal Ordnance Factories amounted to about £32 million. There has been a substantial increase during the last 12 months.
Then, the right hon. Gentleman went on to repeat his argument about work in


progress and stocking up, and I quite see the point that he is making to the Committee. But is it very unreasonable that work in progress in a group of factories like this should increase by approximately the same percentage or proportion as the total production increases? The total output of the Royal Ordnance Factories has increased by about one-third; work in progress has increased by less than one-third. Having given these figures, I think that the right hon. Gentleman might alter the deduction which he has drawn from the figures.

Mr. Strachey: The point I was making was that it has increased more than it was estimated to increase.

Mr. Low: The only point I can make is that experience has shown that the Estimate was wrong. The right hon. Gentleman and the Committee might like to remember that this is the first year that this Vote has been put in this form before the Committee.
My hon. Friend the Member for Weston-super-Mare (Sir I. Orr-Ewing) and the hon. Member for Woolwich, East (Mr. Mayhew) referred to the Report of the Select Committee on Estimates on the Royal Ordnance Factory. I think that I should be out of order if I tried to answer some of the points that were referred to. We have, of course, studied that valuable Report very carefully. I think that I have cleared up the doubts about the numbers of men. My hon. Friend in that connection had a point about the saving in plant and machinery.

Sir I. Orr-Ewing: Before my hon. Friend leaves the number of men, will he give an assurance that if ever he has to come to the Committee again and places the facts before the Committee, he will see that they are set out in a different form in order to make them absolutely clear to everybody?

Mr. Low: My hon. Friend must not press me too hard about the actual form of the Supplementary Estimates. He will appreciate my difficulty in trying to explain any mistakes.
There has been a saving in plant and machinery. As the question was asked, I hope that I may be in order in answering it. The saving is due to delays in arrivals of some important machine tools from overseas. My hon. Friend also referred to inspectors. I ask him to note,

however, that inspectors come, not under this Vote, but under Vote 1, and I think I should be wrong to try to pursue the subject of inspectors under the Royal Ordnance Factory Vote.
The hon. Member for Woolwich, East made an interesting statement on his views and certain facts in connection with certain enquiries which, he told the Committee, were being made. He asked whether we would receive a deputation. I have my right hon. Friend's permission to say that we will gladly receive a deputation, whether the hon. Member is in it or not, about this important matter. I think that I have dealt with all the points that have been raised, and I hope that the Committee will let us have the Supplementary Estimate.

Mr. Mayhew: Since this Supplementary Estimate deals directly with the work of the Royal Ordnance Factories and their production, will not the hon. Gentleman make a statement to correct false impressions about the Ministry's view of the working of Woolwich Arsenal?

Mr. Sandys: I should be very glad to give the hon. Member my assurance that neither I nor my hon. Friend have described, or ever will describe, Woolwich Arsenal as a "white elephant" or "something in the nature of a white elephant."

Question put, and agreed to.

Resolved,

That a Supplementary sum, not exceeding £2,600,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the expenses of operating the Royal Ordnance Factories.

CLASS IX. VOTE 6

Ministry of Materials (Trading Services and Assistance to Industry)

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £33,248,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Materials on trading services and assistance to industry, including a grant in aid.

6.15 p.m.

The Minister of Materials (Sir Arthur Salter): We are asking for an extra sum of £33 million, as compared with the mere token £10


in the Estimate. I have, however, to explain rather more than this, because we had anticipated not only that we should not have to ask for money in respect of this Vote beyond the mere £10, but that we should have a cash surplus amounting to £14 million which would have been surrendered to the Exchequer. There is, therefore, a difference of some £47 million between the anticipations in the Estimate and the position as we now see it.

Sir H. Williams: On a point of order. Are we discussing Class IX, Vote 5, or Votes 5 and 6 together?

The Chairman: We are discussing Class IX, Vote 6, Ministry of Materials.

Mr. Nabarro: There are three Ministry of Materials Votes on the Order Paper. Are we discussing all three separately or together?

Sir A. Salter: It is only the first that we are now discussing. Later, I shall be moving the other two Votes.

Mr. Stokes: The one that is being discussed is the second on the Order Paper.

Sir A. Salter: We are discussing Vote 6, the Trading Services Vote.

Sir H. Williams: Are we going to take Vote 5?

Sir A. Salter: Later on; the order has been changed.
The Committee will realise that the sum now needed is not the measure of a trading loss, but the expected excess of cash payments over receipts, payments of over £284 million as compared with receipts of over £252 million. These are net figures reflecting trading losses and some increase in stocks, both of which increase the sums required, and some trading gains and reduction of stocks, both of which reduce the Supplementary Estimate.
By far the biggest factor is that of trading losses, which, as is shown on page 20, are now estimated for the year to amount to £42.6 million. That figure, of course, is not directly related to this Supplementary Estimate, because it includes a writing down of stocks at the end of the financial year, which is only a paper transaction, and does not involve any cash of the kind for which I am now asking.

The reason for the considerable Supplementary Estimate is partly—mainly, indeed—the same facts which are reflected in the loss shown in the trading accounts and partly an increase in stocks.
It may be said that two-thirds of the difference of £47 million—the difference between what we had anticipated and what we now anticipate—is represented by trading losses, and about one-third by the fact that we hold increased stocks. Why, then, having expected no trading losses in this financial year, are losses of this magnitude now being experienced? The answer, in a word, is that since the Estimate, world prices of most of the materials in the public trading stocks have been falling and that, granting the policy adopted on sales, periods of falling prices inevitably mean losses, just as a period of rising prices means gains.
It has, with minor exceptions and variations, been the policy both of the present Government and of its predecessor to make materials available to British industry at prices closely approximating to current world prices. If prices were lower when the materials were acquired, gains result, but these are surrendered to the Exchequer at the end of the year and not carried forward. If prices were higher losses result and if losses are incurred Supplementary Estimates are inevitable unless the Estimates are to be based on a speculative anticipation of a fall.
I am sure that the right hon. Member for Ipswich (Mr. Stokes) will agree that there is in these circumstances no presumption of better skill or judgment in periods of profit than in periods of losses. I may go a little further and say that, granted the purposes of public trading and the principles of policy which determine its continuation or determination, losses, in the long run, are inevitable. They represent the cost of public service rendered in ensuring a sufficiency of supplies at difficult periods. It follows from that that the State buys when supplies are scarce, and, therefore, dear, and sells when supplies are ample, and therefore cheap.

Mr. Osborne: Why should it do that?

Sir A. Salter: Quite obviously, because the reason we go into public trading is to see that when materials are scarce and difficult to obtain, and, therefore, dear, the industry of the country shall be


assured the materials. That is an expensive process, but when, on the contrary, a particular commodity becomes in ample supply, its price tends to fall and we say then is the time to get out of public trading and we sell off, and, naturally, at lower prices.

Mr. Osborne: Is it the policy that public funds are to be used to protect private enterprise from losses on world price fluctuations? If so, it is an extraordinary gospel.

Sir A. Salter: That, in fact, has been the effect of the policy pursued both by this Government and by the previous Government during the period of particularly difficult conditions in the supply of essential raw materials for this country. We know that is the right policy but you would tell me, Sir Charles, that this is not the time to discuss whether it is the right policy. But, granted that policy, trading services of this kind must in time lose money.

Mr. Frederick Elwyn Jones: For the enlightenment of the hon. Member for Louth (Mr. Osborne), could the right hon. Gentleman give an indication of the type of materials presumably purchased for the public interest?

Sir A. Salter: My hon. Friend will see what they are if he will look at the Estimate; he will see them set out in detail. Obviously, a business concern which, when it makes a gain has to surrender not only a fairly high proportion of the gains which the ordinary business has to surrender to the Treasury but 100 per cent. and has also to buy when things are dear and sell when they are cheap, must incur losses.

Mr. A. G. Bottomley: When goods are in short supply is it not better to buy in bulk?

Mr. Nabarro: No.

Mr. Bottomley: The facts speak for themselves. By bulk buying we were able to get the goods cheaper than private enterprise. The quarrel which private enterprise has with that is that they want to make the purchases all the time notwithstanding the cost to the country.

Sir A. Salter: I am not dissenting from the contention that in a period of very difficult and precarious supplies there

have been advantages in public trading. If the Government were not of that opinion they would not be continuing the measure of public trading which they are continuing at the moment.
The Committee will realise that the significance of Supplementary Estimates for a trading Department of this kind is completely different from the significance of similar Supplementary Estimates for an ordinary spending Department. In the latter case, there is always a strong presumption that there has been a big expansion, whereas, in fact, the basic cause of the Supplementary Estimate for which I am now asking is, on the contrary, that there has been a great contraction in the money value, in the turnover of our money stocks, and the contraction in sales has been greater than the contraction in purchases. That is the big reason for this Supplementary Estimate.
I do not know whether the Committee would wish me at this stage, or at a later stage, to answer questions about particular stocks. By far the most important stocks involved, which explain the total of this Supplementary Estimate, are copper, lead, zinc and timber. Perhaps the Committee would prefer that I should not go at length into details relating to each of them, but I am prepared to say something on each, or indeed on any of the others, if any hon. Member is particularly interested. I think the right hon. Gentleman will agree that that represents the main cause of Supplementary Estimates being inevitably required in a period of falling prices.

Mr. Stokes: I am not really very clear on one or two things the Minister has said. May I begin by offering him my congratulations on being the first pure Minister of Materials. I was not only Minister of Materials but Lord Privy Seal. This is the first occasion on which the appointment has been that of Minister of Materials only.
These figures do not mean a thing unless we know what the stocks are and I want to ask one or two questions about that. If we follow the line of argument of the right hon. Gentleman the figures become immediately contradictory. He said, for instance, if I understood him correctly, that when prices of world commodities fall losses are made and when prices rise profits follow, but that is precisely what has not happened. If we


take aluminium and copper we find that both greatly appreciated in value in the last 12 months. Yet we are being asked for £14 million more for copper and £6 million more for aluminium. That is probably explained by the stocks, but it makes nonsense of this the printed Supplementary Estimates. I do hope that when we have Supplementary Estimates next year we shall have some indication of the stocks.

Mr. Nabarro: We hope that next year there will not be any more.

Mr. Stokes: I should have thought that a hope that would not be met because trade is always uncertain and the Government are perfectly right to stock up in scarce materials. They have to stock up and keep industry going.

Captain Duncan: Would the right hon. Gentleman agree that if the Government believed in stocking up it should be done on Class IX, Vote 17?

Mr. Stokes: That is strategic stock. But strategic stock is for emergency reasons and is not current trade. I shall have something to say about that when we get to that Vote.
In the meantime, I presume that where the Estimates show a debit it means increased stocks over what was expected and where they show a credit it is because they are now off public account and the stocks have been sold. Generally speaking, is that so?

Sir A. Salter: Several factors are operating in regard to each of these things. As the right hon. Gentleman said, we cannot infer from the actual accounts how much is due to one cause and how much to another. In the case of copper, for example, we have considerably more copper and that represents the greater part of the debit. It does not represent any loss to the country at all; we have had full value for the cash involved. The cash for which we are asking is a little less than it would otherwise be, because in the period during which copper has risen in price we have made some small profits. That is the explanation in that case. The precise play of the different factors in the end result varies with the commodity concerned.

6.30 p.m.

Mr. Stokes: I wish that either in the OFFICIAL REPORT or in a supplementary White Paper we could be given the beginning and end stocks so as to give us a better picture. I find it impossible to make what I call a sensible speech on the figures before me. There are too many unknown Xs; indeed, there are very often X, Y and Z, which make it impossible to make any sensible contribution to our discussion.
In the case of zinc, a debit of £16 million is shown. The price of zinc has fallen from £175 last year to £88 this year; whereas in the case of lead, in which a credit of £15 million is shown the price has dropped from £190 to £175. I suppose that has to do with the change of the quantity of stocks, but, again, it is impossible for the Committee to criticise or even to ask considered questions.

Sir A. Salter: That instance very well illustrates, as the right hon. Gentleman says, the difficulty of explaining and discussing these questions. To take the case of lead, we ended public trading in that commodity several months ago. We disposed of considerable stocks and the proceeds reduce the amount of cash which we should otherwise need. We ended public trading in zinc only on the first of this month, and, consequently, we hold and shall continue to hold considerable stocks of zinc, the disposal of which may ease the cash position next year, but not this year.

Mr. Stokes: It is the time lag in trade?

Sir A. Salter: Yes.

Mr. Stokes: I am very much obliged to the right hon. Gentleman.
The next point I wish to make is about timber. We changed over from public trading to trading on private account some time ago. In the Supplementary Estimate there is shown a debit of £9.9 million. Examining the stock position, we find that we have at present 667,000 standards compared with 504,000 standards at the corresponding period in 1951. On top of that is the fact that we are told that we have a much increased housing output. I shall not discuss housing on this occasion, but I wish to ask the Minister whether these are genuine stocks or


whether they are the total stocks at, so to speak, ports of arrival, and that the pipeline between the ports of arrival and industry are virtually empty. Is that what has happaned?

Sir A. Salter: Perhaps it would be more convenient if I answered all the questions together.

Mr. Stokes: Yes, perhaps it would be better if the Minister did so.
This is a point about which I should like to be clear, as it seems to me to be extraordinary, the position being what it is. There has not been a great price fluctuation; in 1951 the price ranged between approximately £70 and £80 per standard and in 1952 it went from £70 to £68 and then went up to £75. The figures before us seem to be entirely due to an increase in stocks. Can the Minister say whether there has been a hold-up in distribution or is there total increase in the supply of timber in the country?
I have not much to say about the increases in respect of copper, aluminium and tungsten ore beyond what I said in my opening remarks, following upon what the Minister said about losses being made when prices fell and profits resulting when prices rose. Here we have two instances in which the price has risen, but there have been losses. Therefore, it must be a question of stocks again, and we get into a muddle in trying to deal with the figures.
That is really all I can say appropriately on this part of the Vote. I suppose that generalisations must come on that part of it dealing with the Minister's salary.
I wish to make one observation about Subhead F, on page 19, which deals with the Volta River project.

The Chairman: The general discussion should take place now.

Mr. Stokes: Then I must almost begin again, as I wish to make some general observations about what is going on.

The Chairman: I think that on this Vote it would be best if questions of policy were raised. It will be easier for that to be done now instead of on a rather narrower Vote.

Mr. Stokes: That advice, Sir Charles, makes it easier for me; it does not interfere with what I wish to say.
We who are interested in the question of aluminium production know what a tremendous effect the Volta River project would have on our dollar problem. When I was at the Ministry of Materials I took some official interest in the project. I should like the Minister to tell me later just what we may expect about the progress of this project. The Supplementary Estimate talks largely about the grant-in-aid for this great project, etc., but are the Government really getting on with the job? Can we have some indication of when work will start and be completed and when aluminium will begin to arrive from that great scheme?
Turning to tungsten ore, we are being asked to vote £3,500,000 more. There again, 1 suppose the reason must be stocks because prices have fallen; it must be partly a question of trading losses, also. The question I wish to ask the Minister is; what is really being done to increase supplies from the sterling area? When I was at the Ministry of Materials we had in a very embryonic stage projects whereby supplies of tungsten ore were to be increased from Uganda. Has anything been done about that? If so, what? I ask these questions because we buy practically all our molybdenum from the United States, which has control of about 90 per cent. of production. As two tons of tungsten replace one ton of molybdenum, it is obvious what could be done if we greatly increased supplies from Uganda.
I wish to ask about sulphur. An extra £3,711,000 is asked for under the heading of "Sulphuric Acid Materials." In that case, the stock position is rather odd, but perhaps I need not go into the details of it. Stocks appear to have risen enormously from September, 1951, to September, 1952–they have about doubled, from 86,000 tons in September, 1951, to 150,000 tons in September, 1952.
Pyrites stocks have increased from 180,000 tons to 415,000 tons. I suppose that that really reflects the fall in the textile trade. Whether that is the reason or not, perhaps the Minister could give us some enlightenment. What has been done to further the conclusion of the 18 pyrites factories contemplated, and in some cases


started, which were to increase the supply from 280,000 tons in 1951 to 900,000 tons in 1954?
What is being done to encourage farmers to use less fertilisers and, therefore, less sulphur, and, incidentally, stop poisoning the people's food? That is a subject for an agricultural debate and not for a debate on this Vote, but, clearly, if sulphur imports could be cut down it would make an enormous contribution to our dollar problem.
Then, finally, on this question of alternative supplies there is the case of nickel. As the Minister knows, all our nickel comes from Canada, which is a dollar supply. This does not occur in this list of items, but on the general question, can he say what has been done to encourage the development of the nickel fields of Tanganyika?

Mr. Osborne: I wish to ask the Minister one or two questions about the price policy which he is pursuing. He said that the real loss, the difference between these Supplementary Estimates and the original Estimates, amounted to £47 million, of which he said roughly two-thirds were trading losses and one-third represented an increase in stocks. That means that the real trading losses are about £32 million.
He said—and it seemed most extraordinary—that when things were dear we went out of our way as a Government to buy them and knew that we would make a loss; and when they became cheap we rushed to sell them and to make a loss. It seems to me a most extraordinary gospel for anyone on this side of the Committee to propound. I would remind the Minister that two years ago we as a party were criticising the former Government for doing exactly the same thing between 1949 and 1950. We accused the Socialist Chancellor of timing his buying and selling as badly as ever it was possible to do. We said that he let national stocks run down when he ought to have been building them up, and that he built them up when he ought to have been letting them run down. Surely this is not the policy which we were returned to pursue.
To me it is most extraordinary. If I understood the Minister rightly, he said that world prices have been falling in the past 12 months; therefore, he said, losses

were inevitable, and the Supplementary Estimate had to be produced. I want to know what policy is being pursued, causing these losses and therefore causing the need for these Supplementary Estimates? I do not ask for the separate prices which have been paid for the commodities purchased. I ask this general question: since it is admitted that our currency has depreciated to about one-third of its pre-war value, are we paying on the whole more than three times what we were paying pre-war for these commodities?
If we are, it seems to me that inevitably we are running into further losses. To my mind buying commodities now for stocking, except for the most vital stocks required for strategic purposes, is a policy of madness. We are buying our raw materials in the face of what must inevitably be an eventual world fall in commodity prices. The Minister's great experience during the war, in co-operating with the American Government in purchasing these types of commodities, enables him to know better than anyone in the Committee—and he will forgive me for reminding him—that world prices are dollar prices. What the Americans pay fixes world prices.
6.45 p.m.
Is there any liaison with the American buying commission, or the American people, in order that we may have a common policy and go into world markets together, and are we working in close co-operation with them? When I was in the United States during the autumn, it was made quite clear to me by a number of American administrators whom I had the privilege of meeting in Washington that, by the end of next year, the intensity of the re-armament drive would be over. That would mean that if the cold war does not expand into a hot war—which nobody wants to see—then re-armament will be on a caretaker basis; the drive will have gone from it, and the urgent need for these commodities will slacken.
That will cause a price fall. The Americans are well aware of that. They can see deflation in the same year, or the next year; some say that by 1955 it is inevitable. Are any plans being made in my right hon. Friend's Ministry, or by the Cabinet, to meet what I consider to be the greatest problem that Western economy will have to face? Are any talks


taking place with the Americans on these matters?
If either the cold war ceases altogether, or the Korean war ends, and there is no urgent demand for these raw materials for re-armament, prices will go down tremendously. Are we then to be saddled with still further losses in the next year, or the year after? Are greater Supplementary Estimates to be presented to pay for the losses which will inevitably be incurred? Is any thought being given to this? Is anything being done to make plans against this eventuality?
There is one other point I put to the Minister. If and when our re-armament drive comes to an end, or if happily the tension between East and West were to come to an end and the need for these commodities were not nearly so pressing as it is today, what policy have Her Majesty's Government got for dealing with the stocks for which we are providing the money tonight? Are they to be thrown on to the world markets and thus cause the slump to be even greater? Will the American Government do anything like that? Have talks taken place on this point? If they are thrown on to the market, it will cause an industrial slump such as we have never seen in our history. This is a question to which I would like to have an answer from the Minister.
I conclude with this quotation from last week's "Economist" in support of what I have said. In making his final report to Congress, President Truman was supported by the report of the Council of Economic Advisers, who reviewed the economic situation, and dealt with this very problem. They are hoping, Or some of them think
… that private consumption will have to fill the gap when government spending for rearmament begins to fall off, toward the end of next year";
that is, at the end of 1954. We shall have exactly the same problem, and if we go on buying when prices are high, as the Minister said, goodness knows what next year's Supplementary Estimates will come to. Thought should be given to this matter now. We should not wait until we are, as it were, hit on the jaw by economic events. Now is the time to do it. I think I am entitled to ask the Minister whether thought is being given to it.
The "Economist" concludes by saying:
But this to the advisers, or at least to two of them, means that deflation is on the horizon and that a difficult period is ahead in which fundamental readjustments will be needed. They foresee that in 1955 (which is at present heavily backed as the year when the country will be face to face with a possible depression). …
and so on. This affects fundamentally what we are doing tonight. This is, as it were, the future we have to face. Whether or not we have lost £32 million in the past year is something we cannot alter. But we can, by wise planning and wise arrangements now, prevent the loss of ten times that amount next year. I think I am entitled to ask the Minister whether thought is being given to this. Are talks taking place with the Americans? Are we facing the difficulties that must inevitably arise?

Mr. Emrys Hughes: I hope that we shall get an answer to the highly relevant questions put by the hon. Member for Louth (Mr. Osborne). Those arguments in the "Economist" were certainly very grave. We wonder what exactly will be the position if, fortunately, the cold war does not develop into a hot war. As the hon. Member for Louth pointed out, and as President Truman said in his Congress Report, if at the end of another year, or perhaps 18 months or two years, we are faced with the fact that the re-armament drive is almost completed and immense stocks of strategic reserves have been built up, then, if the re-armament programme is abandoned, there will be a sudden slump. With a slump comes industrial chaos and, with that, Communism and the conditions which create Communism, against which presumably the strategic reserves were prepared.
The hon. Member for Louth put his finger on a most important point. I should like to have from such an expert as the Minister of Materials, whom we all respect as an economist, some idea of what his policy is likely to be next year or in two years' time. Now that the hon. Member for Louth has raised this specific question, I hope that we shall be given a clear answer.

Mr. Nabarro: I share many of the misgivings expressed by my hon. Friend the Member for Louth (Mr. Osborne). If these figures mean anything at all to me it is that the moral and lesson is that


the State should get out of trading in these commodities at the earliest possible minute. I do not believe that it is a correct interpretation of the position to say that these losses have been incurred merely as a result of falling world prices. The situation has also arisen because there has not been enough enthusiasm on the part of the State to abandon trading in these commodities.
I do not take the view of the right hon. Gentleman the Member for Ipswich (Mr. Stokes) that it is a legitimate purpose for the State to continue trading in these materials in order to assure raw material supplies to industry. That was, I think, the gravamen of his argument. Let me cite just one example to which he himself referred—timber. There is no physical shortage of timber in the world today. I could leave the shores of this country and buy one million standards of softwood without any trouble at all. It is simply a problem of currency—that is all. But, because there a currency problem, that is, in itself, no justification whatever for the State continuing to incur these losses or in fact, making any further contracts for future years.
Having stated what I conceive to be the general principle that ought to guide our future arrangements in these matters, I want to direct some attention to one specific item on page 18 to which my right hon. Friend the Minister of Materials and the right hon. Gentleman the Member for Ipswich made some reference, and that is timber. It is by far the biggest item shown in the Table. Whereas a credit of £13,336,000 was anticipated in the Estimate, this Supplementary Estimate postulates a further requirement of £9,900,000. In other words, from the extremity of the credit to the extremity of the revised requirement is a sum of no less than £23 million. That is the extent of the revision that is called for.
It is an extraordinary position. I want my right hon. Friend to stop me if I misstate the position in any material regard. Timber comprises four constituent elements from a trading point of view: softwood, hardwood, pitwood or pit props, and plywood. All pit props are bought by the National Coal Board, so they do not come into this Estimate. All hardwood has been free of Ministry of Materials control for several years, and does not

come into this Estimate. Therefore, the figures in this Estimate can relate only to softwood and plywood, and that is where the right hon. Gentleman the Member for Ipswich went wrong when he referred to stock figures and assumed that they could readily be converted to so many standards of softwood. He had, with great respect, omitted reference to the consideration of plywood which is covered by this Estimate.

Mr. Stokes: Also with great respect, if the hon. Gentleman will have a look at the statistics, he will find that my figures are absolutely correct.

Mr. Nabarro: Yes, but where the right hon. Gentleman is inaccurate is that he does not take into account the fact that the figures in the Supplementary Estimate also have to cover plywood, whereas he was referring only to softwood.

Mr. Stokes: indicated assent.

Mr. Nabarro: This is the extraordinary situation which derives from this Supplementary Estimate. In the case of softwood timber the Government have made this arrangement in the last 12 months. Importers may buy any quantity of softwood they like without a global or aggregate financial limit. Then, having bought the softwood, it is stringently licensed to the consumer. With plywood, on the other hand, there is limitation or restriction on what an importer may buy. He cannot buy any quantity that he likes. When the plywood comes to this country it is sold to the general public and there is no consumer licence limitation. There is a completely free market.
In circumstances like that, how is it possible to make any accurate estimate of what trading profits or losses may be on timber account for 12 months hence? The two constituent elements in this timber account and the method of operating them are in themselves entirely incongruous. The effect on our economy as a whole is, in my opinion, a very dangerous and serious one. We have steel rationing. Timber is an alternative to steel, but nobody putting up a building in industry, nobody requiring timber or steel for any specific purpose, can proceed with any degree of reliability in the knowledge of what future supplies of either will be, because they are not certain whether they will be able to get a licence


for timber or a licence for steel. The result is, of course, a great wastage of materials and money.
Exactly the same occurs with softwood and hardwood. For softwood the consumer licensing system is very stringent and rigid. There is no consumer licensing system for hardwood. Therefore, because a consumer cannot get a licence for softwood, he buys hardwood, and the hardwood costs him twice as much, or more, as a softwood. I appeal to my right hon. Friend.
This is most apposite to this Supplementary Estimate. It is absolutely essential in the case of timber and these other commodities that the State abandons trading within the next financial year. Only by handing them back to the commodity markets to operate, and allowing private enterprise firms to purchase the commodities, can we achieve two objects—first, reduce prices; and secondly, prevent in the years ahead a call for an increasing drain on our financial resources of the character that is displayed in this sad and most unfortunate Supplementary Estimate.

Mr. Stokes: Am I incorrect in stating that timber is on private account already?

Mr. Nabarro: As I endeavoured to explain, softwood timber may be purchased by private importers, but there is stringent consumer licensing which regulates the flow to the market and, therefore, distorts the whole picture of supply and demand.

7.0 p.m.

Captain Duncan: My first comment, as an ordinary individual and not an expert, on this Supplementary Estimate is that it is jolly bad estimating. To start with, only about this time last year, a nominal sum of £10 was provided, and yet, some nine or 10 months later, the Department comes back to the House and asks for £32,689,990, and that seems to me to be an astonishing way of doing business. That is not even the total, because, as my right hon. Friend said in his speech, it is shown on page 20 that, on a turnover of £287.5 million, the total trading loss was £42 million. If any private business ran its affairs like that, those concerned would very soon be unable to face their shareholders, and would not only be paying a visit to Carey

Street, but would be faced with the complete reconstruction of the company.
I do not pretend to understand these figures any more than the right hon. Gentleman opposite does, because, on these questions of stocks, it really seems to me that my hon. Friend the Member for Kidderminster (Mr. Nabarro) is quite right—the best thing the Government can do is to get out of this business as quickly as they possibly can. There are 16 items listed under Subhead A—"Trading Services (Net)," on page 18, ranging from copper to mica and miscellaneous items. In which of these commodities are the Government continuing to trade? My right hon. Friend said that two-thirds of the total represents losses and one-third increases in stocks, and the note at the bottom of page 18 says:
These figures represent (i) the difference between the receipts from sales of raw materials and payments for their purchase by the Ministry, including payments in respect of distribution and other incidental expenses, (ii) the receipts from the sale of stocks of raw materials in which public trading has ceased.
There must be an additional part of the total which is not, therefore, in relation either to the two-thirds or the one-third representing the receipts from the sale of stocks of raw materials in which public trading has ceased. I hope the Minister will make it clear that the Government are going out of business in trading in these things in the ordinary course of events.
It may be that there is a case for the Government holding strategic reserves of some scarce materials, and that seems to be the tenor of my right hon. Friend's remarks, but in that case the figures ought to be in Vote 17 and not in this Vote. Some of these items which were bought by the Government for defence purposes ought to have been shown, and ought to be shown in future, in Vote 17 and not in this Vote. The right hon. Gentleman opposite does not agree: he wants the Government to go on in this trade, but I do not. I want the Government to get out of it, and let the ordinary market return, but if for defence reasons there is a necessity to buy and hold stocks, I suggest that in future years they should be shown in Vote 17.

Mr. Stokes: I think the hon. and gallant Gentleman has misunderstood what I meant, and I think he has not read the


document correctly. Although there may be some of the same materials in Vote 17 they are given as stock in Vote 6 (III).

Captain Duncan: I quite agree, but what I am saying is that this ought to disappear in future at the earliest possible moment, but that, if any of these items are regarded as strategic necessities for defence, they should appear in Vote 17 and that Vote 6 should disappear.
I hope that, in the near future, the Estimates Committee will have a look at these figures. They have done sterling work in the past in stirring up Government Departments to action, and this seems to me to be a very useful field in which they can discover the rights and wrongs and the complications of Government finance.
As my right hon. Friend offered to deal with any items that are in the list, I shall be very glad if he will deal with these and tell us something more about timber and jute, which I do not pretend to understand. Here is a case of an estimated credit in the original Estimate of £2 million. The price of jute has gone down by half, and yet this estimated credit is now £4 million. In fact, what has happened is that the British taxpayer has had to pay the difference between the price at which the jute was bought and the price at which it was sold, largely because of the fiscal action of the Governments of India and Pakistan.
My right hon. Friend the Minister of Food said not long ago that he hoped to be the last Minister of Food. I hope my right hon. Friend will make a similar statement—that he will be the last Minister of Materials.

Sir A. Salter: I am afraid that a great deal of ground has been covered, and I am not sure that I shall be able to deal adequately with every point that has been raised.
I should like to deal with the point of principle raised by my hon. Friend the Member for Kidderminster (Mr. Nabarro) and my hon. and gallant Friend the Member for Angus, South (Captain Duncan). Certainly, we want to get out of public trading in these materials. Our position is that there should be private trading in them, except where and when there is a decisive temporary reason for public

trading. That reason may be, as it has sometimes been, exceptionally short, scarce and precarious supplies of essential materials for our own industries, or in some cases there has been a currency problem, as in the case of softwoods. Our policy and purpose is to get out where we can.
My hon. and gallant Friend the Member for Angus, South asked me which of these materials we are going to leave to the private market. Well, in the last few months we have left lead and zinc. Granted that there is a decisive reason which will, in some cases, remain for public buying when things are scarce and therefore dear, it will necessarily result—and this is what I meant when I was talking about buying dear and selling cheap—it will necessarily result, as a consequence of that policy and purpose, that when we do get out, because supplies are ample and cheap, we are not able to get as high a price as we had to pay when, because of the dangerous condition of supplies to British industry, we had to buy in a period of scarcity and difficulty.

Mr. Osborne: Assuming that the nation requires a given quantity of materials and that there is a world shortage, is my right hon. Friend saying to this Committee that he believes that a Government can buy cheaper than private people? It is an astonishing suggestion.

Sir A. Salter: I am not making any general statement for all time. For a few years there have been instances—and I think anyone who is concerned with an industry requiring raw materials will agree—when, in the particular circumstances of the time, it was advantageous for the Government to intervene in the acquisition of the supplies in question. I will not expand the point at this moment; undoubtedly, there have been such cases, and that is what I meant. If one is emerging from a period during which that was thought to be necessary and is getting back to private trading as quickly as possible, it will be found that one is getting out at a time when prices are lower than they were when the stocks were acquired.
That is all I propose to say on our general purpose. I am afraid I cannot follow my hon. Friend the Member for Louth (Mr. Osborne) in his question concerning what we should do in a future


year if there were a great world depression, a cessation of the cold war, and so on. After all, what I am presenting are Supplementary Estimates for the current financial year, not even the Estimates for 1953–54, and, in those circumstances, whatever may be the discussions we may have with America or other countries, they cannot affect the provisions for this current financial year.
I think that answers the hon. Member for South Ayrshire (Mr. Emrys Hughes) on his wider question, which I shall be very glad to discuss on an appropriate occasion.

Mr. Emrys Hughes: Next year.

Sir A. Salter: One or two specific questions have been asked about particular commodities. It was pointed out by several hon. Members that the most astonishing item here is, of course, the case of timber. The position about timber is that softwood may now be freely imported, but in order that that should not have an undue result in increasing the non-sterling costs of such imports, it was thought necessary to continue for the time being the restrictions on the actual use of softwoods in this country. That is the purpose, and that is the policy.
It is true that the stocks of softwoods have gone up very considerably compared with our Estimates in March. At that time we anticipated that in the course of this financial year we should get rid of practically all our stocks of timber. But two things have happened. We have had great supplies coming in under contracts made in previous years, the shipment of which was delayed by climatic conditions, and, simultaneously, there has been a slowing down in the demand for supplies in this country.
The right hon. Member for Ipswich (Mr. Stokes) asked me one or two questions about alternative supplies for, I think, tungsten and nickel. He asked why stocks of sulphur had greatly increased. The explanation is partly the one he himself suggested as regards that commodity and pyrites—the textiles depression in this country. As regards the Volta scheme, the right hon. Gentleman will be aware of the White Paper and will know that what is proposed in it is the setting up of a preparatory commission before the main development is under-

taken. We are very actively getting on with arrangements for that preparatory commission, and are in constant contact with the Gold Coast Government. I hope we shall soon be able to make an announcement, which I shall be very pleased to see made, if our hopes are realised. As to the time when actual supplies will be coming from the Volta scheme, that is, of course, a long way ahead.
It is true that there has been a considerable increase in the stocks of tungsten this year, which explains the figure. As to Uganda, we have made offers of long-term contracts there which are beginning to have some effect. As regards nickel, I am afraid the Tanganyika arrangement is a little more distant, and that there is nothing that I can usefully say about it at the moment. Pyrites and sulphur are both related to the textile position, and it is true that the increase in supplies of pyrites has taken place partly in order that we might be in a position to continue the process which is relieving our dependence on imported sulphur in the future. I think I have touched on every point of any importance but if I have not, perhaps some hon. Member will ask me a supplementary question.

7.15 p.m.

Mr. Stokes: I should like to put two points to the Minister. The first is whether, in the event of there being another Paper like this on a future occasion, he will consider whether some indication can be given with regard to stocks, because that would make it much more understandable. Secondly, may I refer to copper—your predecessor, Mr. Hopkin Morris, was kind enough to interrupt me and make the debate a little more general; he said that was the right moment to do it—because I got my notes muddled and did not put the question to the Minister.
The Minister will be aware that the vast majority of our copper comes from the Rhodesian Copper Belt, and he knows how much that is mixed up with coal from the Wankie colliery in Northern Rhodesia. Will he at an early date make it his job to find out what is happening? I have been there, and I think they are doing it the wrong way. There never was such an opportunity for opencast working, but they insist on going underground. There is a lot of fiddling on


price. If the price of coal goes up, so does the price of copper. I hope the right hon. Gentleman will disallow any increase in the price of coal above 13s. 6d. unless they tackle the job properly and do it the right way, by opencast mining.

Sir A. Salter: I recognise the difficulty of interpreting these Supplementary Estimates as each item is a net result of several factors operating several ways. I will look into the point. There are certain difficulties relating to what we publish in the Monthly Digest regarding strategic stocks, but I will look into the question. As regards copper, I shall be very glad to have a talk with the right hon. Gentleman. I have begun to study the particular question he mentions, but I would certainly like to study it further.

Question put, and agreed to.

Resolved,

That a Supplementary sum, not exceeding £33,248,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Materials on trading services and assistance to industry, including a grant in aid.

CLASS IX. VOTE 17

Ministry of Materials (Strategic Reserves)

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £20,140,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Materials in connection with the procurement and maintenance of strategic reserves.

Sir A. Salter: I think this Estimate is less likely to be open to serious question. We are asking for an extra £20 million for strategic reserves. The reason for this is that during this year we have found better opportunities of obtaining certain strategic materials which we did not think we should be able to obtain this year, and we have taken advantage of these opportunities. I am sure the Committee will be glad that we have done so. The extra cash involved corresponds with real value in the commodities we have acquired. It involves no threat of inflation, for extra goods, corresponding to the expense, have been acquired and stored.

Though our reserves of foreign exchange are less than they would have been if we had purchased less, we have, as part of the country's real assets, the value of the extra goods bought. We have, therefore, real value for the extra money we have spent during the course of this financial year.

Mr. Stokes: I do not dispute the policy of holding a strategic reserve at all, nor do I dispute the question of what is or is not good value. Obviously, if there were a crisis it would all be very good value indeed. I am glad to hear the Minister say that it is all being done with due regard to what I call economic purchasing and that there is an avoidance of the quick rush that took place in the international market following the outbreak of the Korean conflict.
Despite the Minister's assurance, what puzzles me is how to tie this up with the assurance given by the Chancellor last year about his intentions. In a statement in the debate on the Address on 7th November, 1951, the Chancellor, talking about the reductions he was going to make to bring about adjustments of the balance of payments and so on and the spreading of the defence programme, said:
Third, we propose to slow down the further carrying out of the strategic stockpiling programme instituted by the previous Government. Good progress has been made on this … and our hope would have been to maintain this progress."—[OFFICIAL REPORT, 7th November, 1951; Vol. 493, c. 199.]
And four or five months later, on 11th March, 1952, the Chancellor said in his Budget speech:
… the provision for strategic stockpiling is reduced from £143 million to £61 million in the current year."—[OFFICIAL REPORT, 11th March, 1952; Vol. 497, c. 1285.]
I am trying to tie up those figures with the figures now before us. I know that they probably do not refer to the same thing, but the difficulty that I find is to reconcile these matters. Is the policy which the Minister is following in accord with what the Chancellor intended? I do not in the least mind if it is not, but I should like to know. The Chancellor said that he was going to run down stockpiling and here the Minister says, "I want a great deal more than I estimated that I wanted." Will the Minister make the position clear?

Sir A. Salter: As the right hon. Gentleman realises, the two sets of figures are quite different and cannot be related one to the other. He will remember that last March we were in a very desperate foreign exchange and particularly dollar crisis. What the Chancellor did, among other things, was to ease the strain by restricting dollar purchases of strategic materials. But there was not a similar and equal restriction of purchases of strategic reserves coming from other sources. If one takes the purpose of the Chancellor's original policy and statement and the actual course of what has been happening one will not find the inconsistency that the right hon. Gentleman suggests, although of course there has been a certain modification in the position as the emphasis in our balance of payments problem has changed.

Mr. Stokes: Let us agree that both the Minister and the Chancellor were acting in watertight compartments and that the Chancellor was not paying any regard to what the Minister was doing and the Minister was not paying any attention to the Chancellor, but what I find strange is that the Chancellor did not say that we were going to run up and increase strategic stockpiling but said that we were going to run it down. He said it twice in five months in that period, and in the latter part of 1951 the Ministry prepared estimates of stockpiling for 1952–53. Therefore, it comes as very surprising that the Estimate of £49 million is increased to £65 million. One would have expected the Estimate for 1953 to be something greater or the actuality to be something less.

Sir A. Salter: The right hon. Gentleman will realise that the Chancellor's purpose was to restrict foreign exchange, particularly dollars. He will also realise that there have been opportunities of moving some commodities from the public trading stock to a strategic reserve without involving increased importations from abroad. That is one of the factors, though not the whole explanation.

Mr. Osborne: On the question of price policy, could my right hon. Friend assure

us that the price he is paying for this unexpected windfall of materials, for which we are asked to vote an additional £16 million late in the financial year, is not greater than the price ruling at the beginning of the year when the original Estimate was brought before us? I ask for the reason that he said that we bought when things were dear. I should like to have an assurance that we have not paid through the nose for this.

Sir A. Salter: I thought that I had explained earlier, but it was misunderstood, about buying dear and selling cheap. Of course we do our utmost to buy these strategic materials when we have a certain choice and the opportunity is given to obtain the materials cheap. I could not make an exact answer to my hon. Friend the Member for Louth (Mr. Osborne) as regards every commodity without taking each one by one, but in general we are taking advantage of good opportunities of buying when the going is good.

Lieut.-Colonel Sir Walter Smiles: I agree with the right hon. Gentleman the Member for Ipswich (Mr. Stokes) when he throws compliments and bouquets at the two Ministers. As far as I can see, the impression was given abroad that the British Government were not in the market for strategic materials and the prices dropped. Then some other Minister comes in by the back door and buys these materials much cheaper. I commend that policy. It is bad policy indeed when one advertises to the whole world that the British Government are in the market for strategic materials and immediately prices go up. I hope that the Government will continue the policy of buying as cheaply as possible.

Question put, and agreed to.

Resolved,

That a Supplementary sum, not exceeding £20,140,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for expenditure of the Ministry of Materials in connection with the procurement and maintenance of strategic reserves.

CLASS IX, VOTE 5

Ministry of Materials

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £10, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the salaries and expenses of the Ministry of Materials.

Sir A. Salter: All that I need to say with regard to this Vote is that we forecast considerable economies in the personnel of the Ministry of Materials to the number of about 430 posts in the course of this year. I am happy to say that we now expect that by the end of the year we shall have made further economies of about 300, making a total of about 700.

Mr. Stokes: I should like to follow that up by asking the Minister to tell us whether the total of about 400 and 300, making about 700, refers in any manner to the paying off, as it were, of the Timber Control or refers to a genuine reduction in the Ministry. My suspicion is that it has something to do with Timber Control, whose staff numbered about 900 when I was the Minister. If the Minister will answer now I will sit down. If not I will carry on. Well, perhaps the Minister can find out.
This virtually is a Vote for the Minister's salary. He said that economies have been made in the staff, and I am very glad to hear it. As I said earlier today, the Minister is to be congratulated on being the first pure Minister of Materials. Previously the Minister's job has been a dual occupation. Now—I presume because the job is important—one Minister has to concentrate the whole of his attention on supplies of raw materials and we have a whole-time Minister for the first time. That being so, I should like to ask him one or two questions.
First of all, I should like to emphasise that when I introduced the Bill to form the Ministry two years ago we stressed that we were not going to ask for a Parliamentary Secretary. The Minister's salary, in fact, was carried on the Vote of the Lord Privy Seal. There is no question of there being a Parliamentary Secretary; there is a full-blooded Minister costing £5,000 a year extra on the establishment. I do not complain about that, but this is virtually a Vote for the

Minister's salary. Therefore, I want to ask him one or two simple questions about some of the things he has been doing and will continue to do, which I could not ask him on the earlier Votes which we have been discussing because they had no relevance.
7.30 p.m.
First of all, can the Minister tell us how the International Materials Conference is going on and how many materials are being covered—

The Deputy-Chairman (Mr. Hopkin Morris): I do not think the right hon. Gentleman would be in order if he attempted to reply to that question.

Mr. Stokes: But surely this is a job which the Minister has to do. When I was Minister of Materials, almost within three or four days of being appointed I got into a boat and went straight to Washington where I discussed with the people there what they should not do.

The Deputy-Chairman: The right hon. Gentleman's point, that this work may well have been done by a Parliamentary Secretary and that the salary is not necessary, is in order, but I do not know about the question of policy. I think that question is out of order.

Mr. Stokes: May I ask why we cannot have a Parliamentary Secretary instead who would have been able to do this sort of work? As the Parliamentary Secretary is not here, will the Minister give us some indication of what is going on? It is vitally important. The Minister knows the extent of the materials shortage. He knows how much in the future depends on what is done now.

The Deputy-Chairman: I think the right hon. Gentleman has made clear what is in his mind, but the Minister would be out of order if he were to reply to it.

Mr. Stokes: But with great respect, Mr. Hopkin Morris, surely if we are in effect voting a Minister's salary, we are entitled to ask him a few questions about what he is doing. That is all I am saying. I wanted to go into a little more detail with one or two pungent remarks. Am I not allowed to be pungent because the sum on the Vote is only £10?

The Deputy-Chairman: The right hon. Gentleman is not allowed to be pungent because this is not the occasion.

Mr. Stokes: What better occasion can I have than this when we are dealing with the Minister's salary? What the Government have decided to do is to establish a full-blooded Minister free from all other encumbrances, who is not allowed to meddle in other Departments like I was allowed to do, and who is free to give his mind to the job.

The Deputy-Chairman: The question whether there should be a Minister appointed at this salary or a Parliamentary Secretary is in order, and I think that is the point of this Vote. The question what policy the Minister pursues is another matter.

Mr. Stokes: I suppose I shall have to give in if that is your Ruling, Mr. Hopkin Morris. I had some remarks to make which I am sure the Committee would like to have heard. I shall have to reserve my remarks until another occasion. I hope that the Minister will have a talk with me behind the "iron curtain" so that I can indicate more clearly what I wish to say today.

Sir A. Salter: I should have been delighted to answer the right hon. Gentleman if I had been allowed to do so. As regards the reductions, it is true that a considerable number of those reductions related to people connected with the Timber Control, but there are several hundreds that fall outside that figure.
As regards my salary, all I can say is that if the right hon. Gentleman wishes to know why a new Minister is appointed, I think that is a matter for my right hon. Friend rather than for myself.

Mr. Stokes: The Minister ought to know.

Sir A. Salter: I do not think it is really for me or for a representative of my Ministry. I do not think that the right hon. Gentleman's time and energy, devoted to the conduct of the Ministry of Materials, were substantially reduced by his care of the Privy Seal.

Mr. Stokes: Perhaps the Minister will remember that I was engaged across the water on the South Bank on the "slap and Tickle" at Battersea Park, and I also had a little adventure with Dr. Mossadeq.

Mr. Bottomley: Is it the Minister's intention to liquidate the Department by passing on all the work to private enterprise?

Question put, and agreed to.

Resolved,

That a Supplementary sum, not exceeding £10, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the salaries and expenses of the Ministry of Materials.

CLASS VI. VOTE 4

Export Credits

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £14,818,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March. 1953, for the salaries and expenses of the Export Credits Guarantee Department, and for payments under guarantees given after consultation with the Export Guarantees Advisory Council.

The Secretary for Overseas Trade (Mr. H. R. Mackeson): I can see that I shall have to be very careful to keep within the bounds of order, but I am genuinely very anxious to give the Committee as full an explanation as I can of this very large Supplementary Estimate and to state as fully as I can what is the situation which has arisen and how it has arisen.
The Vote for export credits has for many years been a token one, the receipts from premiums and other items which are brought to account as appropriations in aid being more than sufficient to meet all the Export Credits Guarantee Department's administrative expenses and payments under its commercial guarantees. Except for the early years of the Credit Insurance Scheme and the war years, when deficiencies inevitably occurred, a substantial contribution has been made to the Exchequer. The net total of the contributions, after offsetting the deficiencies referred to, amounts, during the period of the years 1928–29 to 1951–52, to nearly £11½ million.
In order that the situation which has given rise to the need for this Supplementary Estimate may be seen in its correct perspective, it is necessary to trace briefly but in some detail the history of the Department's experience in connection with Brazilian trade, for it is the Brazilian trade which is responsible for this very large Supplementary Estimate.
It must be said that the present kind of situation is not altogether unknown, but of course it occurred in different degrees. It happened in 1950 and 1951 as it happened in 1952. During 1950 the Department paid about £450,000 in claims. mainly due to import licence difficulties, and only a proportion of this sum has so far been recovered. In 1951 approximately £2 million was paid, most of which has now been recovered. During 1952–53 a much larger sum will be be paid, but it is expected that most of this will eventually be recovered.
In the 1951 crisis the Export Credits Guarantee Department, after very careful consideration and in consultation with its Advisory Council, decided that notwithstanding the serious delays in payment, the situation could be met by maintaining cover with a sharp increase in premium. The reasons for this were that, although heavy transfer claims were being paid and delays were not expected to diminish substantially for some months, the signs generally were favourable. In fact, arrears of payment did begin to come in and the position was more or less brought up to date.
The Department accordingly reduced its premium on Brazil, but made it clear to its policy-holders that the new rates should not be taken to imply that the Department considered the risk of non-transfer of sterling from Brazil to be non-existent. This warning was given because it was considered that, in spite of the favourable outcome of the difficulties encountered during 1951, certain factors, notably the running down of wartime reserves, which meant that Brazil would be faced with annual seasonal deficits with many countries, were still operating against complete recovery. Subsequent developments have confirmed this forecast, and at the end of December, 1951, delays were already beginning to become apparent. This was thought to be no more than the usual seasonal tendency, it being quite usual for Brazil to run a deficit in the winter and to earn sterling when the spring comes and she starts selling her cotton crop.
Brazil fell into sterling arrears in the winter and the main Estimate for 1952 was placed at the usual token sum of £100; but by the end of May, 1952, transfer delays had reached five or six months.

After the most thorough investigation and careful consideration, the Department was forced to the conclusion that the risk of loss arising from import exchange restrictions was beyond the scope of normal commercial underwriters; that no premium adjustments could cope with the financial implications of the short-term situation—as had been the case in 1951–and that, based on liabilities existing at the time, heavy claims payments by the Department were likely to be involved.
It may be asked by the right hon. Member for Ipswich (Mr. Stokes), and other hon. Members taking an interest in this matter, why the Department did not first put up the premiums before suspending cover as it had done in 1951. There are two or three answers to this. The position in May, 1952, was much more serious than in 1951. Owing to the seasonal adverse balance of Brazil it is only possible late in the year to see how the position develops. By May transfer delays had reached five or six months.
The second point is that there are limits beyond which it is not possible to use high premiums as a deterrent. The third point was the necessity for acting quickly. Some quick-acting remedy was very necessary. I think the Committee will agree that since May developments have shown clearly that any other action would have resulted in the E.C.G.D. having to pay out a much larger sum than the £14.8 million for which this Supplementary Estimate is asking. Consequently the Department, after consulting its Advisory Council—which, as hon. Members know, is drawn from men with great experience in many walks of life—decided that it could no longer continue to assume liabilities to an unlimited extent until the Anglo-Brazilian payments position showed signs of improvement.
The Department's policy-holders were therefore notified at the end of May, 1952, that, while cover would continue to be given for contracts then in hand and, in addition, to shipments which could be completed by the end of July, 1952, further cover would, except for certain special transactions, be withdrawn. The E.C.G.D. undertook to fulfil its current contracts and exporters were given two months to make their shipments.
This decision was naturally extremely unwelcome to exporters. From 29th May


onwards, when I assumed my present appointment, heavy pressure has been put on my Department, on my right hon. Friend and myself, to reverse the decision and to continue the E.C.G.D. cover to Brazil. I make no complaint about that; it is only natural. The pressure came from many reputable firms, trade associations, chambers of commerce, hon. Members on both sides of the House and Members of another place but, much as we dislike and have disliked having to adopt this policy, I think it will now be seen that it was the right one and that we really had no alternative than to stand firm. It has not been easy.
These events were reported to the House on 9th July last, in the Adjournment debate to which I replied. I mentioned then the principal reasons for this development in Anglo-Brazilian trade, notably the over-pricing of cotton and other commodities Brazil has to sell. I made it clear then that the Government were just as anxious about the situation as the Brazilians, but that it would not be proper for Her Majesty's Government to interfere with the day-to-day working of the Raw Cotton Commission or direct them to make a non-commercial purchase of Brazilian cotton. I do not think anybody could argue, in the position which Lancashire was then facing, that the industry should not get cotton at the most suitable prices.

Mr. Stokes: I understood the Minister to say that one of the reasons there was this excess was the cost of Brazilian cotton; but surely, in the period under review, cotton prices have dropped by about 30 per cent.?

7.45 p.m.

Mr. Mackeson: The point which the right hon. Gentleman has missed is that Brazilian prices have been artificially held very much above world prices. I am speaking without a note, but I think I am right in saying that they were as much as 16d. a lb. more. Discussions have taken place in Rio de Janeiro about the problems of Anglo-Brazilian trade.

Mr. Leslie Hale: Will the hon. Gentleman explain who took part in these discussions?

Mr. Mackeson: The discussions were conducted between Her Majesty's Government, the Ambassador, the Commercial Minister and the Brazilian

authorities. My right hon. Friend the present Minister of Materials, then in the Treasury, has also had discussions in Mexico with the Brazilian Minister, and since then the Government have been having informal discussions here with the Brazilian Ambassador, and it is hoped that more formal consultation will be started at an early date. I cannot say more than that, as I told the House on 22nd January.
When the Department came off risk, its liability was estimated at £32 million. Up to the end of December, 1952, it had paid out £5.8 million to its policyholders, while claims totalling £3.2 million were under examination. There are further claims, amounting to £5.8 million, which are expected to come forward in course of payment during the last quarter of the financial year; so that the payments directly attributable to these exports to Brazil amount to £14.8 million and the Supplementary Estimate as now presented is almost entirely due to the claims paid or expected to be paid by 31st March in respect of these exports to Brazil.
In the debate on Anglo-Brazilian trade which took place in July, 1952, the Department was charged with taking panic action, but part of the effect of remaining on risk to the limited extent which was then the subject of criticism can now be seen. It is, however, not the complete cost and I must be careful to mention that in the main Estimates there is another considerable sum to cover further claims.
That is not a bright picture to have to give to the Committee, but there is a brighter side to it. There is no doubt that Brazil is a great country, that she will expand, and that her expansion is at the moment only in its infancy. It must not be forgotten that these payments are almost entirely due to the fact that sterling is not available to effect the transfers of the payment to the British exporter. They should not, therefore, be regarded as irrecoverable loses and the Department fully expects to recover in due course substantially all the amounts paid out.
But it is not anticipated that sterling is likely to be available in any quantity until the next financial year at least, and no credit can therefore be taken for such receipts in this Supplementary Estimate. It will be seen that the present situation


arises partly from the fact that the Department is bound by the ordinary budgetary rules and vote-accounting procedure.
In conclusion, I should like to stress one point. The payments which the Department have made or have to make, which are covered by this Supplementary Estimate, have assisted many United Kingdom firms to keep their production going, and they have maintained full employment. A considerable proportion of our trade with Brazil in past years has been conducted under the E.C.G.D. guarantee and the Department have played a valuable part in many parts of the country in maintaining exports of a wide variety of goods and full employment.
We must face the fact quite frankly, however, that we cannot go further now, and it is with regret that I have to ask for this very large sum.

Mr. Bottomley: The Secretary for Overseas Trade has given us a clear explanation of the reason why he has to come to the Committee tonight and asked for this Supplementary Estimate. I do not think it would be fair to pass any criticism on him or his Department. If we are to level criticism tonight—and I think it is justified—it should be directed to the Government as a whole because of the policy which they are now pursuing. A restrictive trade policy can do no other than bring about results such as this. If other countries are stopped sending goods here, in due course they will put up barriers which will st us sending our goods to their country and claims upon the Export Credits Guarantee Fund will result to meet the losses that industry suffers.
I should be out of order if. I developed that theme much further, but I am bound to say that the failure of this Government is shown by the measures introduced which are against public enterprise, and I fear that this might be a surreptitious device for again destroying another public enterprise. I recall on an earlier occasion that the Department had to come to the Committee for a Supplementary Estimate. The then Opposition, now the Government, criticised the Department and said that it ought not to exist and someone else said that if it were run with due efficiency

there could not be a loss. All that is untrue. It is a mistake to expect any insurance company—and that is what this Department is—to give all its profits each year to some other corporation, and then to start afresh in another year. That clearly has got to be looked at some time or another, but is not a matter to develop tonight.
As the Secretary for Overseas Trade has told us, the cause of the troubles here arise with trading from Brazil, and I should like to put one or two questions to him. First of all, he might explain more fully why his Department did not close the risks earlier than the end of May and why, in fact, they allow other contracts to be taken up until the end of July. He has given us some explanation, but I should have thought that, having in mind Government policy, somebody like the President of the Board of Trade, who is a member of the Cabinet, would have been able to say to the Export Credits Guarantee Department, "We are going to have these difficulties and you ought to fix your premiums higher or you should not accept liabilities at all." The Government have not given a direction of that kind, and I do not think they have considered it. If they had given such a direction, then, of course, we would have a criticism to make of the Department for which the Secretary for Overseas Trade is responsible.
I should also like to know whether there is any truth in the statement made in the House by a Member on the Government side that the Government interfered with the sending to Brazil of railway equipment, made to the country's specification. If the Government did interfere that certainly was hindering trade, and we ought to be told something more about it and whether this is one of the cases where a firm is making a claim upon the Department.

Mr. Ellis Smith: Has my right hon. Friend some evidence of that?

Mr. Bottomley: It was a statement made by a Member on the Government side of the House, and as yet I have not seen an answer to it. I hope the Secretary for Overseas Trade will be able to tell us something about it.
In the middle of last year a group of businessmen came from Brazil and made


a tour of Europe. What happened then? I can well understand the difficulties in the Department. The Department of Overseas Trade, which is now a subsidiary to the Board of Trade, is an important part of Government administration. It is responsible for our export trade, and we all know how vital that is. Yet in a short time we have had two Ministers at the Department, the second being appointed before the first had a chance to understand the nature of the Department.
These Brazilian businessmen came here. Were they received by anyone at all, or were they left alone? I should have thought that it would have been a good opportunity to get hold of them and say, "Look here, there are trading difficulties between our countries and we should try to straighten things out." We could have sent them back as propagandists in their own interests as well as in ours, with the result that we might not have had the difficulties with which we are confronted today.
I should like to be told also what is the estimate of the result of the salvage operations. Not all the goods being turned back from Brazil will just be left to lie about. They will be sold, but what efforts are being made to sell them, and will the Board of Trade give all the help possible to industry to enable them to sell the goods either in Brazil or in some other countries or even on the home market? Have we any idea what the return will be? I accept what the Secretary for Overseas Trade says, but I should like him to give us some idea of what he expects in returns either now or in the not too distant future.
I quite expected the hon. Gentleman to tell us something about the tour which the Joint Under-Secretary of State for Foreign Affairs, the Marquess of Reading, is making in that part of the world. Has he gone to Brazil and, if so, what is he doing? I must say I would not leave it to the Foreign Office to carry out a job of this kind. It would be much more useful if the Secretary for Overseas Trade made the journey himself. Latin America is so important to our trade that it ought to be done.
Finally, may I ask the Secretary for Overseas Trade if he himself will closely look into the Department and its work

in order that he can clearly understand what is meant by a well run, efficient Department. He will then be able to make the strongest possible representations to the President of the Board of Trade. He will see that this public enter-price serves the country well, and it ought not to be put in the invidious position of having to come to this Committee as a scapegoat to ask for a Supplementary Estimate of this kind.

Mr. Charles Fletcher-Cooke: There is just one question I should like to ask my hon. Friend. I suppose that his Department is subrogated to the rights of exporters in these contracts and is precisely like any other insurer. For that reason he has all the legal rights of any ordinary insurer as to taking action for breach of contract, and I hope he will pursue these to the utmost. In all these matters the feeling is abroad among those with whom we do business that, although individual traders may insist on their rights under the arbitration clauses or in the courts of whatever country the contracts provide, the Government for some reason have inhibitions about taking legal action and, therefore, are in a weaker position that the private trader. They are not nearly so concerned at taking legal action as would be the case if the private trader had to bear the brunt of the loss himself.
That carries me to one further point. Does the Department, when underwriting the risks, examine the contracts entered into to see that they are as legally binding as such things can be made to be? I hope it does, because otherwise in the end it will be the public who has to bear the burden.

Mr. Hale: Behind this Supplementary Estimate lies what I should think is the most fantastic story of international trade ever revealed to the House, and the most extraordinary classic example of how export trade, international trade and international affairs should not be conducted. I was very glad indeed that my right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) took the line he did in a speech which was all too short, because the first thing that must have surprised the Committee was the attitude of the Secretary for Overseas Trade in presenting the Supplementary Estimate.
I do not disagree very much with what he said, but it was the emphasis that he made. He apologised for this Supplementary Estimate with an air of deep regret and in the hope that no one was going to be rude to him for having to present this Supplementary Estimate. Then, in conclusion, he gave a few facts, which are strong facts in favour of the Supplementary Estimate but he also gave them with an air of apology. If he had come to the Committee and boasted that he had got away with this combined attack on the boneheads of the Treasury, he would have received some cheers from this side of the Committee.
What is the particular position about this, because it concerns us all in that it has grave implications for the future. The Export Credits Guarantee Department, when initiated and when in very able hands for some years, was regarded as a classic example of a first-class public authority which was helping to open up new markets, helping to underwrite new markets and helping with commercial research into the exploration of the new markets. It was doing a very good job of work. It was never intended that it should exercise precisely the functions of a bank which held out an umbrella in fine weather which was to be packed up at once when it was raining. Indeed, once it has taken that function it ceases almost at once to be the first-class authority we hoped, and to be able to discharge the functions which it was hoped it would perform.
8.0 p.m.
One of the very big items involved in this matter, and certainly one of the industries vitally affected, is the textile machinery export industry. I think I am right in saying that at the time of the closure and cessation of export guarantees there was £3 million worth of textile machinery made and almost ready to send in compliance with orders from Brazil, and that the machinery had to stay in this country and seek other markets. As a result of that, and because of an administrative decision, two great firms in Oldham were closed down. One of the firms is changing hands and being turned into a store, or something of that sort. The other is due to close down in March. Both firms have operated in Oldham for more than a century and they were the lifeblood of this industry.
The Minister was very courteous and helpful about this. I make no criticism of him at all, except to say that he ought to be boasting about his achievements. He comes along and says, "This is due to a lack of sterling." We ought to consider the Brazilian point of view of this matter as well. As I understand it, the prime difficulty arose from the devaluation of the £. I gather that the Treasury now say, "Why do not the wretched Brazilians devalue the cruzeiro in accordance with our currency so that we can trade with them on the old terms?" One reason is that the principal creditor of Brazil is the United States of America. They owe a great deal more to the United States of America than they owe to us, so that if they devalued the cruzeiro they would make their debt to the United States Government go up out of all proportion to their present indebtedness.
We are faced with the position that if we wish to continue the export trade with Brazil we have to try to evaluate, and obtain a position in which we have some of the things to which the hon. Member for Orpington (Sir W. Smithers) often refers, bulk purchase and bulk sale agreements. I should have thought there never was a more classic example of the need for some such arrangement and it seems quite lamentable that it has been left to an aircraft firm to go over there and try to negotiate on its own, because of the failure of Her Majesty's Government to do anything effective and successful about it.
Let us look a little more into the situation as we know it. We are told that our vital need is raw cotton. We are told that one of our really vital needs is raw cotton either from non-dollar sources or from a dollar source with which we can do a reciprocal export and import trade without worsening our balance of payments position. There, in Brazil, is the raw cotton. We are told that one of the vital necessities for building up the export trade, which the armament programme reduced, is to export more textiles and textile machinery. There is a country which says that it is prepared to place orders for vast quantities of textile machinery, at a time when there is unemployment here in the textile machinery industry. We reply that we cannot do it, and that the Brazilians are


most unreasonable people because they want too much for their cotton while we are asking very little for our textile machines.
If that really is the position of Her Majesty's Government in regard to international trade, the sooner they go out the better, from every point of view. If it really is the position that the men of Oldham are to be out of work because we are unable to send machines to Brazil, and that the men and women of Oldham are to be out of work because they have not the raw cotton from Brazil to keep the textile industry going, we have to face the most fantastic position that we have ever heard of in the history of our trade.
This situation is heightened by the fact that in the old days we very frequently had an export surplus with Brazil, and the surplus went into investment there, most of it very profitable. I have not the figures with me. I know there was some default in respect of some of the investments, but on the whole I think it can be shown that our investments in Brazil did very well.
Here is a great nation with about the same population as our own, with 35 times our area, and with vast natural resources which have never been fully geophysically surveyed. Even from the limited surveys which are now available, it is clear that the country could produce immense sums to add to the wealth of the world. The answer we are constantly getting is that it is impossible to get agreement: "We cannot agree on prices. Let the people stop out of work until we get an agreement. Something may happen."
In his opening speech, the Minister did not get very far from that position. As I understand it, when he came to the facts about the way in which the present position has come about, he made a rather remarkable statement. He said in respect of 1951 that it was not anticipated that in the end there would be any loss. If that be so, why not insure it? Why not go on? The Minister said that by May, 1952, they found that they were five months behind with their sterling transfers, and the result was that they had to make a sudden decision. By comparing that May with the previous year, they found they were five months behind and the situation had become serious.
Why have these decisions to be taken annually? Why cannot they be subject to considerations and representations from time to time? I take it that they knew in April that they were four months behind, and in March three months behind, and so on. The statement that we are now given is that when only two months' notice had been given, the export guarantees were cancelled, although export guarantees in respect of large export orders are very vital. The hon. Member for Darwen (Mr. Patrick Maitland) talked about taking proceedings. I should have thought that the Export Credit Guarantees Department was today, to say the least, of all the banks the very bankiest. They say to a firm that have a 12 months' delivery date for the building of big machines which take many months to construct—some of them about 18 months—"Unless you send the stuff out within two months, get it on shipboard and get it away, your export guarantee is finished." There could not have been a more drastic way of affecting the workers of Oldham.
I ask the Minister to admit quite frankly, so far as Oldham is concerned, that we were in this position in 1951: exports of textile machinery had reached a record. A new record was created and there was every indication of prosperity. Orders were taken and men were being fully employed. Some 6,000 or 7,000 men in Oldham—I am speaking from memory—were fully employed. This decision is suddenly taken, and in July we are faced with the prospect of closing two big works, with a whole scheme of re-organisation, and with skilled men who have been in the town for years being drafted out. They are leaving Oldham by bus to work at Squire's Gate, Blackpool, or in Huddersfield, or are being asked to go by bus to Sheffield.
I am very happy to say that there has been no very great increase in engineering unemployment, but men who have worked happily for years are travelling 20 or 30 miles a day to seek employment which, of its nature, may very well be temporary. The ultimate effects may be very bad indeed.
We come up against two more fantastic dichotomies in connection with this extraordinary situation. Everybody knows that the great trouble of the world


today in terms of international trade is the huge export surplus of the U.S.A. I do not say that in any sense as one opposed to the American conduct of their own affairs because I do not think they can help it. They are not doing it deliberately or maliciously, but that export surplus with out a chance of paying for it is the most harmful thing in international trade today.
Yet we have the United States of Brazil with a huge import surplus at the moment. There is no dollar area in America as there is a sterling area in the British Commonwealth, so that countries here are suffering the worst of both possible worlds: they are having to battle to produce goods that the U.S.A. do not want and are having to force them into the United States market to balance the dollar situation. At the same time they are not able to send the goods that the United States of Brazil want, which would equally solve the dollar situation if there were a dollar area in America. It is the most fantastic of all propositions.
I should have thought that we had been moving over these last few months—not merely the great party on this side of the Committee but also men of good will belonging to all parties—towards the theory that if we as an island are ever to solve our international trade problem, we can only solve it by the creation and development of new markets. Here is a market that does not even need to be created, it only wants a little financing.
I once suggested that world trade would be better when people paid for their exports and not for their imports. Ever since then people have regarded me with some dubiety as one of those people who at times say humorous things without any foundation for them. No one seems to realise that this is exactly what the United States has done since 1945 and is compelled to do—she has to finance her exports. Some day the rest of the world will realise that. It is no use saying to the workers of Oldham, "Make more textile machines," saying to the workers of Pakistan, "Make more textile machines," saying to the workers of Switzerland, "Make more textile machines" or to the workers in all the textile industries, "Make more textiles," unless someone has some idea where the products are to go.
We have the fantastic situation in every textile country that trade union leaders, politicians and economists are urging the workers to work longer hours, to turn out more goods, to pile them all up. They are saying that we have to be more economical, that we have to be prosperous, that we have to make more goods when no one has the faintest idea where those goods are to go. And yet we can go to any part of the world and see millions of people who need textiles, who passionately want textiles, who are prepared to work for textiles, who are prepared to work to build up the prosperity of their country, but who are not allowed to do it.
This is the dilemma that faces the world today. I do not blame the Minister for his grave statement. Throughout the discussions on this matter he has met us with every courtesy, with every desire to give us information and, within the limitations of some old-fashioned ideas about economics, to try to seek a way out of this dilemma. But there the dilemma is —walking up and down the streets of the villages in Brazil today are cotton growers and workers who cannot sell their cotton; walking up and down the streets of Oldham today or taking buses to Huddersfield and Sheffield, are textile machinery workers who cannot make textile machines.
All over the world there are people who need the products of that machinery and the products of that raw cotton. And the Minister comes to us today and says, "Well, boys, we have probably lost a bob or two on this and I am sorry about it but I hope you will not be rude to me. I am glad to say I have stopped it now. We shall have unemployment in the textile machinery industry, in the textile manufacturing industry and on the cotton growing plains of Brazil. We shall have a little contribution to international misunderstanding. We shall have the fantastic dollar unbalance remaining unchanged when all those things could have helped to put it right. We shall have all that, but I have bunged up the leak and you should at least say 'Thank you' to me for having done it."
I, for one, am not prepared to say, "Thank you." I want the Minister to reconsider this matter in the light of all that has been said and to say that he will keep the channels of trade open and will


battle to recreate full employment in Lancashire. He is the man who can make a substantial contribution to it if he will try a little harder in the future.

8.15 p.m.

Sir W. Smiles: I also am interested in the problems of Brazil on account of the linen industry of Northern Ireland, because Brazil used to be one of our best customers. Today, however, when one goes to the Chamber of Commerce and asks about the Brazilian trade, they raise their hands and say, "Don't speak of the dead," because the linen industry in Brazil has been shrinking and shrinking.
I was extremely interested in the speech of the hon. Gentleman the Member for Oldham, West (Mr. Hale). He said that in the old days we used to invest the surplus money from our exports of machinery, linen and other textiles in the country to which we sent them. We built railways in India, in the Argentine and in Brazil. The hon. Gentleman said that those investments had done extremely well. However, I think he rather over simplified the position and many investments, such as the Bank of San Paulo and others, have paid very badly. At any rate, at the time we made those investments there was no serious unemployment in this country.
It seems to me to be really a battle of currency, of how we can keep up the value of the £ here or the value of the currency in Brazil. The hon. Gentleman said that the policy of restricting imports of cotton into this country, while it might save our British £, would have a bad effect upon our exports. I agree that the Gloucester Aircraft Company put themselves at the head of the queue in 1945 by their charter agreement for raw cotton, but I think we have to look farther than Brazil and farther than the United Kingdom for a cure. The recent reports of the chairmen of our banks indicate that until we re-value gold, these trading difficulties will continue.

Mr. Ellis Smith: I want to interrogate the Minister with a view to obtaining more information, and I hope he will make a note of my questions and give answers to them. Before doing so, may I make it clear that I am an admirer of his Department. It has done great work of a constructive character. It has a great past but, if this country is to

play its part in world trade, it will need to have a greater future and more resources at its disposal.
This is a very serious matter. The Minister comes before the Committee and asks for £14,818,000. This is where we have got to in this country. Before the war, no Minister would dare to have stood at the Box and asked for such a huge sum. In these days, when we are asking industry to reduce its costs of production and to economise in every possible way, and the same thing with municipal government and with individuals, the Government should be most careful, when making up their Estimates for the forthcoming financial year, to try to visualise what is likely to take place.
That may be considered by those responsible in the Department to be a little unfair, because of the uncertainty in the world, but I will come to that. Since the Minister is asking for this large amount, why has no White Paper been issued? If the hon. Gentleman did not think that a White Paper should be issued, the very least that the Committee are entitled to expect—I hope that this will be borne in mind in future—is that an Explanatory Memorandum ought to have been issued when so large a sum is asked for.
If the Minister and the Department regard that as an unfair criticism, my reply is that the Navy and the Ministry of Defence are doing it, and the Army issue an Explanatory Memorandum. It is true that it is not satisfactory, but it is a big step in the right direction, and I think that in future if the Minister comes along for such large sums as this, the least that the Committee are entitled to expect is an explanation in the form of a White Paper or an Explanatory Memorandum accompanying the Supplementary Estimates with which we are dealing.

Mr. Mackeson: I take the point that the hon. Member is making, and will look into it. Of course, fairly full information is given in the Annual Report.

Mr. Ellis Smith: Yes, but when will that be issued? As soon as we part with this Vote tonight, the Minister has the £14,818,000. As it happens, I think that his Department are deserving of it because of their past record, but it might be a Department that is not worthy of it and in which we do not have the same


confidence. This shows the correctness of what I am putting forward.
Under Subhead A is an item:
Further provision required mainly for 61 additional posts.
The Committee are entitled to expect some explanation of why these additional posts have been created. I do not carry this criticism too far, but we are living in very difficult and serious times and the country is trying to pull itself together economically; nearly everyone is doing his best. It may be that every one of the 61 additional posts has a satisfactory explanation, but before the Committee votes such a large sum as the £18,600 that is sought, we are entitled to some explanation of why these additions are required.
I had working with me for years students from India and China. There is enormous goodwill towards us in those two large countries. It may be that some of these additional posts have been created for the purpose of capitalising some of that goodwill to enable us to obtain orders there for power plant, electrical apparatus and other kinds of machinery that will be urgently required when China and India get going by setting us the example, and when they leave us behind because they are beginning to plan their economy in a modern 20th Century manner and do not deal with it in the backward way in which we deal with it. Therefore, I should like to know whether any of the men appointed to these additional posts have been charged with the responsibility of capitalising the enormous goodwill which this country has in China and India.
Was there any thought of using any of the additional sum to deal with the temporary economic difficulties in Australia and New Zealand? I am a great admirer of these two countries. They have come to our support in two world wars, and we ought to do all we possibly can to work with them as closely as we can. It would be out of order to go into an explanation of what created the economic difficulties in Australia, but those difficulties were there and, as a consequence, the Australian Government had to take action.
As soon as Australia took action, it reflected itself—fundamentally, this is the explanation of the temporary recession—

in the cotton industry and also in the pottery industry. Were any of the men appointed to these additional posts charged with the responsibility of anticipating any future situations of that kind and of taking steps to prevent them? If they are charged with that responsibility, they will have no greater supporter than myself if that is the purpose of these additional posts.

Mr. Kenneth Thompson: I simply want to make use of the remarks of the hon. Member for Oldham, West (Mr. Hale), who led into what seems to me to be the fundamental matter that is at stake in this debate. The history of the fall in our trade with Brazil and of the attitude and actions of the Export Credits Guarantee Department and of the Department of my hon. Friend the Secretary for Overseas Trade throughout the whole of these events leaves us facing an immediate Supplementary Estimate of £15 million; and we do not know the size of the estimate that is to be presented for next year. That is the situation at the moment in terms of £ s. d.
We are not getting anywhere, either as a Committee, as a country or as a Government, if we regard this purely and simply as a matter to be assessed in terms of profit and loss on a Department's Estimates. The function of the Export Credits Guarantee Department is to enable or to help our industry to find its way into world markets and there to sell its products, and to provide our people at home, not only with jobs, but with a livelihood, with a means of maintaining themselves in dignity and independence. The Minister can come to the House as often as he likes and say either—as it was suggested he was saying—" We have stopped the leak," or, "We have got the money in our books and it will balance," but if the-position is that the Export Credits Guarantee Department are not continuing to help British industry to find its way into the markets of the world there is no satisfaction for this Committee, or for the country as a whole.
The situation which developed in Brazil did not begin suddenly in May, 1952. Its beginnings can be traced as early as October, or November, 1951. It is sometimes difficult for a business or representatives of trade associations to find their way into the inner halls of the Government, but


surely it cannot be difficult for one branch of a Government Department to make its experiences and opinions heard in another branch of the same Department.
If the Export Credits Guarantee Department knew in October, or November, 1951, that there was a possibility of this situation arising, and the economists and financiers knew it, it ought to have been a purely routine matter for the senior Department, the Department of Overseas Trade, to have been apprised of what had happened. But then we have a history of six or seven months before anything else happens.
8.30 p.m.
Warnings and rumblings were going on all the time in industry and the exchanges of the world, but no stark presentation of a new situation was made until the announcement—to which we have had reference tonight—in May, giving industry a two-month deadline to clear their stocks or carry the lot themselves. By July, 1952, not only the Export Credits Guarantee Department but the Department of Overseas Trade and the Board of Trade and, I hope. the Government knew that here was a situation which might be disastrous.
I wanted to know in July and I have asked on numerous occasions since, what steps we took to deal with it? I did not ask in any sort of criticism or by way of complaining that nothing had been done, although I thought I had cause to do that. I wished to ask in July, 1950, that there should be a dynamic, forceful approach by the Government, or the Department of Overseas Trade, to the Brazilians to try to resolve this difficulty which the hon. Member for Oldham, West (Mr. Hale) so graphically described.
The Brazilians possess things we need and we have things Brazil needs, and to put together those two simple equations and get the right answers is what I asked for. We know that in recent months there have been discussions, at different levels, between the two Governments, but I urge my right hon. Friend to go away with a great sense of dissatisfaction, having got this Vote, and to try to solve this problem of settling the difficulty on an equitable basis to enable us to gain the advantage of trading in a great and expanding market.

Mr. Eric Fletcher: As this debate has shown, the Committee take a very great interest in the working of this Department. I do not think we could well exaggerate the importance of the activities of the Export Credits Guarantee Department to the economic welfare of the country at present. I feel with my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) that the actual day-to-day administration of the Department for many years has been a model for other Government Departments. But this is one of the rare opportunities we have of criticising some of the policy decisions of the present Government, because the day-to-day working of the Department is dependent on policy decisions for which the Ministry are responsible.
This Supplementary Estimate falls under two heads. There is the larger part of it required for this default in regard to Brazil of £15 million and the additional sum for salaries. All that could be said has been said in regard to the £15 million in respect of Brazil. but I hope that when the Minister replies he will give some estimate of how much of that sum he thinks is likely to be recovered. I am not sure whether it all represents payments to exporters in respect of goods which were delivered to Brazil or, if not, how much represents payments to exporters for goods which owing to cancellation of the trade with Brazil had not been despatched, or if the goods are available either for the home market or for export to other countries.

Mr. Mackeson: I will try to answer that question accurately. Transactions are going on, some goods are already manufactured and in the pipeline, but broadly speaking most of the money which we have to pay out will be for goods actually delivered. I could not give a specific guarantee, as the matter is highly complicated. For instance, there has been a reference to textile machinery. Quite a lot is still in the pipeline—being made.

Mr. Fletcher: I appreciate the hon. Gentleman's difficulty, and I do not wish to press him further on that point.
I am more anxious to say a few words about the other item in the Supplementary Estimate, namely the request that this Committee should vote a sum


of £18,600 to provide for salaries for 61 additional posts. The whole Committee will welcome that demand as being an indication that the work of the Department is expanding and therefore requires additional staff. I am anxious to know in what direction that additional staff is required. I say that because, as I understand it, one of the most important parts of the work of the Department relates to the export credits guarantees that are given in respect of our trade with Eastern Europe and the countries behind the iron curtain.
The Minister will be familiar with the fact that Members on this side of the Committee have repeatedly pressed that we should do everything possible to expand the trade between this country and the countries of Eastern Europe. It is well known that no one can do any trade with Eastern Europe without the backing of the Export Credits Guarantee Department. I gather that there have been some difficulties recently.
Am I right in thinking that one of the reasons why these additional posts are required is to enable the Department to extend the trading facilities with Eastern Europe? Would I be right in thinking, for example, that one of the countries with which the Minister is anxious to encourage trade is Yugoslavia? All Members of the Committee are taking a great interest at the moment in the development of trade with Yugoslavia. It is also fairly well known that Yugoslavia is by no means satisfied with the credit facilities which she is getting from this country.
I hope that in the interests of good relations with Yugoslavia, to which I, as I am sure all other hon. Members, attach great importance the Minister will say something about the matter. We are all very glad to know that Marshal Tito is shortly to pay a visit to this country. Would I be right in saying that one of the primary reasons for that visit is to discuss with the Minister the extension of the export credit facilities being given to Yugoslavia? Could the Minister explain, for example, why Yugoslavia feels that his Department does not give her, the same generous facilities that are given to other Eastern European countries, for example, Greece and Turkey? Is there any reason why there should be

this differentiation? Would the Minister not feel that in view of the changed conditions it is time that the terms of credit facilities available to Yugoslavia should be at least as reasonable and generous as those in the case of Greece and Turkey?
After all, the whole of our trade with any of these Eastern European countries, to which we attach so much importance, is entirely dependent upon the facilities which are given by the Secretary for Overseas Trade by virtue of his responsibility for the Export Credits Guarantee Department. It is a matter of vital interest to this country. I can well understand that there was a time when the risks which were being run by the Government in that direction were considerable. I hope that one of the reasons for this request for additional staff—we have not been told exactly what it is for—is to enable the Government to adapt their policy to the changing world conditions.
We have heard from the Prime Minister that in his view the danger of war has receded. Therefore, the risks involved in trading with any part of Eastern Europe are not so considerable as they were a couple of years ago. If there is that harmony between one Government Department and another which this Committee is entitled to expect, I hope we shall find a reflection of that general outlook in the international situation on the terms of credit and trading which exporters and traders in this country are to get from the hon. Gentleman's Department; because that is the crux of the matter.
This is one occasion when this Committee should probe very seriously into this matter. I can well understand that the Export Credits Guarantee Department has to judge the risks of giving their guarantees from month to month. They are in the position of insurers, and hitherto they have done their work remarkably well. I think I would be right in saying that the losses which have fallen on this Department, as a result of the underwriting they have done in respect of trade with Eastern Europe, has been practically negligible. The blame is that additional facilities are not always opened up as and when desired, and I hope we shall hear from the Minister much more about why this additional staff is required; with what countries the


Government are hoping during the current fiscal year, and the next fiscal year, to expand the facilities which his Department was established to provide for the trading community of this country.

Mr. Mackeson: I am grateful to the Committee for the way in which they have received this Supplementary Estimate, and I should like to answer hon. Members as fully as I can.
The right hon. Member for Rochester and Chatham (Mr. Bottomley) commented on the fact that the Government did not foresee the situation before May, 1952. when the E.C.G.D. cover was withdrawn. The explanation is that trade between Brazil and Great Britain was running approximately at the rate of £60 million to £65 million either way in 1951, and that cotton imports from Brazil were £30 million in 1951, whereas the cotton imports in 1952 were under £1 million, for reasons I have already given. I think it may be considered that we might have made a wrong decision if we had anticipated that there would have been this terrific cut. It was a difficult thing to spot.
I was interested in what the right hon. Gentleman said about railway equipment. I do not know of any Board of Trade decision in this matter and I must confess that this is the first I have heard of that allegation. If the right hon Gentleman will put a Question on the Order Paper, I shall be very happy to provide him with an answer.

Mr. Bottomley: If the Secretary for Overseas Trade looks in HANSARD, he will see that the question was put by one of the Government supporters. and if he would be kind enough to send me the further answer he sent to that hon. Gentleman, it would satisfy me.

Mr. Mackeson: Thank you. The right hon. Gentleman and other hon. Members have referred to the visit of businessmen One prominent gentleman said how grateful he was for the way he had been treated by the Board of Trade. We did go out of our way to try to explain to the Inter-Parliamentary Union Delegation from Brazil—it was a large one—our anxiety about the way our trade was going. This is more a question not of the amount of money that we are likely to get back but of when we are likely to get it back. That is the problem.

Brazil has been in difficulties before, as have many other countries and she has got out of them.
8.45 p.m.
I was asked about my noble Friend the Joint Under-Secretary of State for Foreign Affairs. He is back and he has reported to the Government. As some polite remarks were made about the officials in the Department, I would say how sorry we are that Mr. Somerville-Smith has retired. We wish him success in his retirement and congratulate him on the decoration he received. The hon. Member for Darwen (Mr. Fletcher-Cooke) need have no inhibitions about legal action or fear that any step has not been taken to see that the contracts are tied up.
The hon. Member for Oldham, West (Mr. Hale), as I expected. made a strong and powerful case for his own constituency. I would point out to him that the Department has covered £5 million worth of textile machinery for export, most of it, to Brazil in the last year. If that had not been done, the effects on Oldham would have been very much worse. The trouble is not one of the E.C.G.D. providing guarantees for this industry, because the Brazilian authorities have refused import licences. It really goes back to the basic problem of Anglo-Brazilian trade. As far as the hon. Gentleman's remarks about raw cotton are concerned, it is true that we want the cotton, but the fact of the matter is that world demand has gone down now owing to the slump in the textile industry, and we are under severe pressure from Pakistan—which, after all, is a fellow member of the Commonwealth with us—Egypt, Turkey, the Sudan and many other places, to take their cotton.

Mr. Hale: When the hon. Gentleman talks about world demand in this way. he sends a cold shiver down my spine. He means the number of people who can pay for the stuff in spot cash, but when I talk about world demand I talk about the number of people who want the stuff. If he would talk in that way, we should get somewhere.

Mr. Mackeson: On the immediate policy for capital equipment, we have considered and met some requests. Hon. Gentlemen referred to priming the


pump, but we cannot prime the Commonwealth countries adequately. That is one of the difficulties with our slender resources. In reply to the hon. and gallant Member for Down, North (Sir W. Smiles), I would say that there is no intention of preventing imports from Brazil.
The hon. Member for Stoke-on-Trent. South (Mr. Ellis Smith) mentioned the question of an explanatory document. I should like to look at that suggestion, but Civil Estimates are dealt with in a different way from Service Estimates where a document is always laid. It is not usual with Civil Estimates. Both he and the hon. Member for Islington, East (Mr. E. Fletcher) asked about the increase in staff. A sum of £4,000 is required this year for additional staff to deal with all these difficult questions in connection with Brazilian underwriting alone. Then there is another requirement caused by a small increase in wages to messengers and some increased overtime.
The officials of this Department have had to work very long hours to deal with these complicated matters. I cannot specifically say that any of them are required for Yugoslavia, but I can confirm that it is the desire of my right hon. Friend to see a mutual trade between Yugoslavia and us on as high a level as possible, and our endeavours will be used with that in view. Part of the increase in salaries is because the Government have now put the dollar Latin-American countries such as Mexico on to the same basis as America and Canada for credits guarantee, so that will require additional staff.

Mr. Ellis Smith: The hon. and gallant Gentleman has made a very reasoned explanation up to now of the need for this Supplementary Estimate to cover increases in salary, but it is stated that there are to be 61 additional posts, and it is that which is causing us concern. There is a sum of £18,600 required for 61 additional posts, and the point I was making was that, before we vote this sum of £14 million, we ought to be given some explanation why these additional posts are necessary.

Mr. Mackeson: I have already explained that £4,000 is required in dealing with Brazil and a small sum in respect of messengers and an additional number of officials needed to deal with specialised credits being given to exporters who wish to export to the Latin-American dollar countries. There is a small increase in North America and the Department generally is expanding its work so that it has been necessary to find more officials in order to make certain that it works at its full efficiency.
So far as the hon. Gentleman's point about Australia and New Zealand is concerned there is a small amount contained in this Supplementary Estimate for Australia, but exporters to Australia and New Zealand did not make so much use of the Department's facilities as those exporters to countries where the risks were considered greater.
The hon. Member for Liverpool, Walton (Mr. K. Thompson) said that we were not getting anywhere, and this is a problem which I know causes him great anxiety. I would point out that this is a Brazilian problem as well as a British one, and I am glad to see in the "Financial Times" today—although it is in such small print that it is exceptionally difficult to read the advertisement—an offer from the Bank of Brazil to sell some of this 1951–52 crop under certain conditions, which any hon. Member may be able to read in the Library. I hope that is an encouraging fact, but we must still remember that there are other countries from which we can get cotton, and we must buy as competitively as we can.
I think I have answered most of the points put to me. We will note the point made by the hon. Member for Oldham, West, but I think he must remember that we have gone a long way with the taxpayers' money to assist his constituency.

Question put and agreed to.

Resolved,

That a Supplementary sum, not exceeding £14,818,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1953, for the salaries and expenses of the Export Credits Guarantee Department, and for payments under guarantees given after consultation with the Export Guarantees Advisory Council.

Army Supplementary Estimate, 1952–53

Motion made, and Question proposed,
That a Supplementary sum, not exceeding £35,000,000, be granted to Her Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March 1953, for expenditure beyond the sum already provided in the grants for Army Services for the year.

SCHEDULE



Sums not exceeding



Supply Grants
Appropriations in Aid


Vote.
£
£


1. Pay, &amp;c., of the Army
11,300,000
*—690,000


2. Reserve Forces (to an additional number not exceeding 6,000, other ranks, for the Regular Reserve and to an additional number not exceeding 29,000, all ranks, for the Army Emergency Reserve), Territorial Army, Home Guard and Cadet Forces
400,000
—


4. Civilians
3,800,000
*—630,000


5. Movements
4,500,000
—


6. Supplies, &amp;c.
4,400,000
*—300,000


7. Stores
7,500,000
*—250,000


8. Works, Buildings and Lands
1,950,000
*—410,000


9. Miscellaneous Effective Services
150,000
400,000


10. Non-effective Services
1,000,000
—


Total, Army (Supplementary) 1952–53£
35,000,000
*—1,880,000

* Deficit

The Secretary of State for War (Mr. Antony Head): I am very well aware that, in asking the Committee for £35 million, I am fulfilling a task which will not be welcome to most hon. Members on either side, because, although this sum represents only about 8 per cent. of our total expenditure on Army Estimates, it is, nevertheless, a very large sum. At the present time, when I think hon. Members on both sides of the Committee are agreed that expenditure must, as far as possible, be held down for obvious economic reasons, such a Supplementary Estimate is bound to be one on which hon. Members on both sides will wish to satisfy themselves as to the reasons.
Since I have been at the War Office, a very large amount of the efforts which I have made there have been directed towards the field of creating economies, both in expenditure and manpower, without interfering with our preparedness for war and fighting efficiency. I hope to be able to explain to the Committee that this Supplementary Estimate does not represent a failure in these attempts at economy, but that it rather underlines the fact that, unless certain economies had been made, the Supplementary Estimate would have been much bigger.
The major reasons for this Supplementary Estimate stem from reasons which were to a large extent outside our control. The economies to which I refer have enabled us, as the Prime Minister said in the defence debate, to level off to some extent the upward trend initiated in the £4,700 million programme. Indeed, that process of levelling off is, perhaps, more relevant to this year's Estimates than to last year's, although that trend was reflected in the Estimates of last year as well. I shall have a good deal more to say about measures introduced for the purpose of achieving economies when I introduce the Estimates for this year.
As I say, the main reason for this Supplementary Estimate can be attributed to factors which were outside our immediate control, and, in the main, they stem, firstly, from the increased orders for and delivery of textiles owing to the difficult situation in the textile trade; secondly, from the increased numbers in regular recruiting; and thirdly, from rises in prices and wages over and above the agreed basis of calculation in the Estimate. It may well be said that those rises are common to all three Services and it may be asked why the increase should arise only in regard to the Army Estimate.
In the Estimate for 1952–53, we budgeted very closely indeed. There was, so to speak, no fat left in the Estimate. In addition, I think that hon. Members who have studied this subject will agree that in attempting to level off this expenditure to some extent the Army is in a somewhat different position from the other two Services because it has, so to speak, far less freedom of manoeuvre for that purpose. The Admiralty, and to a marked extent the Air Ministry, are expanding at a comparatively rapid rate


as a hot-war preparation. They are expanding their forces and ordering very large quantities of new equipment.
The size of the Army is fixed by our overseas commitments. It is not intended to expand its size, and there is no possibility, or question, at the present time of reducing it. Therefore, the framework and size of the Army—which is equivalent to 11⅓ divisions—has at the present moment to be maintained, clothed, fed, paid and moved, and in many areas sustained in its cold-war commitments. Thus the field for reductions is a limited one.
In the Estimates now under discussion and in respect of which we ask for a Supplementary Estimate, there were, of course, broadly speaking, two fields in which some economies could be realised. The first was in the field of new production which is, strictly speaking, rearmament in its most literal sense—the production of new weapons, and so forth. The second field was that of maintenance which covers, as I have said, clothing, equipment, movement, pay, and so forth.
In preparing the Estimates for 1952–53, some reductions of a minor kind were made in the new production field. We attempted to place as much as possible of that reduction on maintenance. In doing so, as I have stated, we budgeted very close. Last year's Estimates would have been without any supplement this year had it not been for these new factors which I have mentioned, and had we been a Service perhaps more dependent on deliveries for rapid growth it is likely that under-delivery would have more than absorbed these unforeseen factors. I will say something about that in a moment.
9.0 p.m.
On page 7 of the Supplementary Estimate there is tabulated the division of the Supplementary Estimate broadly speaking by causes. I hope that it will be for the convenience of the Committee if I go through these main divisions by causes in general terms and then touch aspects in the more detailed Votes of interest or particular importance. The first table gives a sum of some 10,250,000 increased expenditure on pay and maintenance of personnel. I have already said that recruiting figures have exceeded expectations. Hon. Members may ask why
that

was not foreseen. I think that hon. Members who have studied this problem will agree that the introduction of the three-year Regular Service scheme was one the immediate results of which it was not easy to foresee.
In 1951 when Regular recruiting was on a longer basis the total of Regular recruits was 23,000. In 1952 the total was 49,000, or more than double and an increase of 26,000.

Mr. George Wigg: rose—

Mr. Head: Perhaps I have taken the point out of the hon. Member's mouth. Hon. Members will say, "But those extra recruits do not make much difference because you would have had them anyway as National Service men." The point is that of that increase of 26,000 in recruiting, 23,000 is an increase of recruiting from civil life, that is to say, young men who come straight from civilian life into the Army. The point about these young men is that almost all of them aim to join the Army as soon as they can, that is to say, at 17½ years, because that means that if they mean to leave at the end of three years they will be out at 20½.
By and large, young men from civil life join at a younger age. Therefore, this increase in the Regular recruiting to some extent has had the result in this field of lowering the age limit. Hon. Members know that we lowered the age limit by three months and it made a great difference in the number of National Service men. Those young men would not normally have been in the field of National Service during this first year of the short service scheme.

Mr. Wigg: I am sure that it would save time if we cleared up what appears to be a mistake in the figures. The figures put over at the weekend by the right hon. Gentleman's public relations officer, that is, the total number of recruits obtained during 1952, were 40,157. But if one takes the return published in the Vote Office—the last being on 11th November—and adds to it the figures given in "The Times" this morning, the total is 52,000. There is that difference. I think that the explanation is that the figure of 40,157 which the public relations officer published was the number of men who had entered through the recruiting offices. Now the right hon. Gentleman has given two more figures—23.000 for 1951 and 49.000


for 1952. Will he explain his 49,000 and the 40,157? Comparing 1951 and 1952, will the right hon. Gentleman say what numbers of men would have been serving in the Army had they not taken the three-year engagement?

Mr. Head: That is a perfectly fair point, though I hope we are not going too deeply into the question of recruiting. I am only too glad to give the figures. The 40,000 to which the hon. Gentleman referred was the return which came through the recruiting offices. That is checked by the record offices. There are a certain number of men who can join in other ways than by going properly through the recruiting offices. I will read the figures. Would the hon. Gentleman like the figures only for 1952 or for 1951 as well?

Mr. Wigg: For 1951 and 1952.

Mr. Head: The figures are as follows: Regular engagements: the recruits from civil life in 1951 were 12,068 and in 1952, 35,742. That is the field which may join a bit younger than the age of 18. The numbers of soldiers with previous service are about the same—1951, 4,233; 1952, 4,449. Transfers from short-service engagements: 1951, 2,177; 1952, 892. Transfers from National Service: 1951, 4,604; 1952, 8,306. Those total respectively: 1951, 23,082; 1952, 49,389.
I think those are the main figures. There are, of course, boys to be added on to that, short-service engagements and, of course, the W.R.A.C.s. The figures I have announced give the main picture of the growth of Regular recruiting which has taken place in the last year. As I say, that has contributed to a higher Regular content in the Army at the present time, and also increased numbers, because we have been recruiting from a field which would be closed to us—that is to say, young men between 17½ and 18. There have been certain other increases. For instance, the recruiting of W.R.A.C.s has doubled, and I am sure we should all be pleased about that. There has also been some increase in the numbers of officers.
There has been some under-estimate in the War Office of the average or mean rate of pay throughout the Army. This is always a difficult problem. Army pay is calculated by taking a mean rate to cover the whole field and it is proved by events that that was slightly too low. Even a fractional under-estimate can,

with the numbers that we are dealing with, amount to a considerable sum.

Mr. Wigg: If I may interrupt the right hon. Gentleman, he mentioned short-service engagements. As I understand it, what he means by the term "short-service engagement" is a current engagement which carries no reserve service; so that technically it is not a Regular engagement at all. Or is he calling the short-term engagement the three years' and four years' service?

Mr. Head: I am obliged to the hon. Gentleman for putting that point. One can confuse the new Regular short engagement with a short-service engagement. The figures which I read out were the transfers from short-service engagements—the real short-service engagements. That is the type to which the hon. Gentleman referred. Anything to do with Regular recruiting is the new short three-year engagement and is not to be confused with the new short-service engagement. I hope that explains the first of those items.
The second point is the increase which is caused by an increase in prices, wages, fares and freight rates. As hon. Members know, when Estimates are made out an agreed basis for wages is arrived at and our total requirements are calculated on that basis. During the current year prices have exceeded those on which calculations were made and with the amount of activity going on with an Army of this size—almost all abroad and with very considerable movements—any increase in prices is reflected in our Estimate. Increases in respect of such items as petrol, oil, lubricants, food, movements. wages, increases in National Insurance and so forth, has meant an increase in the amount of the Estimate.
The third cause, namely, increased pensions, is the result of Government action, which hon. Members will recall, whereby disabled pensioners were given some increase in May, 1952, and there is some charge for the new Forces families' pensions which have only just been introduced, to cover them to the end of the year. That is partly consequential on changes in the rates of pensions.
The fourth cause is concerned with the extra orders placed to relieve the situation in the textile industry. Hon. Members will see that that is put at £4½ million in the Estimates. Those orders


were deliberately placed by the Government to relieve the situation. I do not want to anticipate by going through particular Votes, but I think it is relevant to mention the item for stores, in Vote 7. Hon. Members will see that the total asked for in the Supplementary Estimate in the clothing field is £10 million, and after taking away the £4½ million I have just mentioned, practically the whole of the remaining £5½ million can be attributed to faster deliveries of orders placed than was forecast by the Ministry of Supply for this year. I think that is a natural consequence of under-employment in the textile industry, resulting in an added concentration on Goverment orders when consumer orders in this country and export orders overseas were failing. Those two factors combine to cause that increase of £10 million.
The fifth item consists of a list which cannot be classified except by a lot of subheads, but the main item is movements, which shows an increase of £3.7 million. That movements increase is caused mainly by increased activity in the Middle East. There has been an increased amount of movement and we now have very considerable forces in the Middle East. In addition there is a variety of other items under this heading, such as works, stores, postage, local overseas allowances and so on, which I shall touch upon in a moment, when I come to the particular Votes.
There is also a decrease in appropriations in aid which amounts to about £3 million. Of the total appropriations in aid that is not a very vast proportion. It amounts to about 3 per cent. of the total, and estimating for appropriations in aid, I think hon. Members will agree, is a somewhat conjectural and speculative matter. The right hon. Member for Dundee, West (Mr. Strachey), in the year before last, found that he was a little pessimistic in his appropriations in aid. As a result his Estimates were a little less and his pessimism considerably benefited the Treasury. We attempted to make our Estimate very tight and this year we have under-done it by some 3 per cent.
Before hon. Members make their comments, it might be of use if I run briefly through the items which I think are of particular interest in the actual

Votes. I think I have covered fairly fully the question of pay, under Vote 1. and I do not think that needs any further explanation. Vote 2, which is a sum of just under half a million pounds, is largely attributable to the fact that attendance at camp and for training in the Territorial Army in the past year has been extremely good and has exceeded the forecast of those who were working out the expenditure. In addition, more men have gone to the Army Emergency Reserve, as hon. Members will see, from the note at the end of this Vote, which is a very welcome state of affairs. This Estimate would have been larger had we spent more on the Home Guard, but that is a matter into which I cannot go now.
The main single contributor in Vote 4 is the wage increase, which accounts for some £2 million. In addition, contained in Subhead K particularly, is an added expense caused by the disappearance of civil labour in Egypt. When the situation deteriorated the majority of civil labour in Tel el Kebir and other big depots walked out and essential jobs had to be filled by substitutes. Some of the substitutes were expensive.
In addition, we have succeeded in building rather more covered accommodation than we thought we should, in order to store the valuable equipment we are now getting, which is a very welcome fact, and that covered accommodation is being manned by storemen and those who look after equipment. That accounts for an increase in numbers covered in Subhead K of the same Vote.
There is also some increase in civilians in the British Forces Educational Services, which hon. Members may remember we took over from the Foreign Office about six or nine months ago. That now appears on our Vote. The remainder of Vote 4 is self-explanatory and in Vote 5 I have stated that the main factor is the increase in movement due to the situation in the Middle East.
9.15 p.m.
There are other points which are contributory. Hon. Members may remember that it was decided last year, in order to avoid cross posting, to move units as a whole instead of posting men to one unit remaining for a long period abroad. In the interests of regimental morale this is a welcome step, and for that reason the


added expenditure will be welcome. We also decided that no one unit should have more than one winter in Korea at one stage, and that has put something extra on to the movements Bill.
In addition, the present tempo and state of the cold war is not likely to decrease our movements bill in any way, because every time there is some particular incident or difficulty it is apt to stimulate movement and causes changes in units, big or small.

Mr. Wyatt: Could the right hon. Gentleman give us any idea of the number of people moving at any one time?

Mr. Head: I should not like to be specific about the present minimum, but it has been estimated that on an approximate estimate there are about 30,000 at any one time. It is our object—and we are now studying the subject—to get down the number of non-effectives, notably by the use of air transport.
What will catch the eye of hon. Members in Vote 7 is something which is rather a disappointment, though not disaster, and it is that warlike stores are down by £13 million. As I told hon. Members, when we made out the Estimates we were very careful not unduly to reduce in any way our expectation of warlike stores and we were more tender on the subject of any reduction than anything in any other field affecting us. The Ministry of Supply have not been able to fulfil the complete orders, but that is not in any way a failure. It amounts to about 8 per cent. of the total, or, to express it in another way, it is about three weeks' worth of deliveries. That compares favourably with the performance of the year before, when they were 20 per cent. down on the forecast.
When one considers the very large amount of orders, and the difficulties that exist in production, and of course the general problems which there have been in industry regarding exports and other matters, we cannot complain. I am sure all hon. Members would like to see us getting as near as we possibly can to that target which is the insurance that the large Army that we possess will be adequately equipped in the event of war.
The remainder of Vote 7 consists of subheads A and B, which are the main items. I have already referred to them.

They cover first of all the textile trade, with increased purchases and a higher rate of delivery owing to difficulties elsewhere in placing orders. Secondly, in the field of general stores, there is almost the equivalent sum. To a limited extent it reflects the difficulties in the textile industry because it includes such things as tents and tarpaulins. They reflect the easement of demand elsewhere for these types of stores, making it easier to meet Service requests for such items.

Mr. M. Stewart: In his remarks about Vote 7, Subhead D, the right hon. Gentleman demonstrated clearly that it is possible to give a very brief explanation of a decrease and keep within the rules of order. Profiting by that experience, will he say a little about the decrease shown in Vote 2, Subhead H?

The Deputy-Chairman (Mr. Hopkin Morris): The right hon. Gentleman must not go too far.

Mr. Stewart: I am only suggesting that we might have a few words of explanation comparable with those which we have had just now from the right hon. Gentleman.

Mr. Head: I have no objection. I apologise to you, Mr. Hopkin Morris, if I transgressed the rules of order in this matter. I have not looked at Vote 2, Subhead H, but I am guessing that it means the Home Guard. I can perhaps put the matter in one or two lines. The decrease is due to the fact that we got out the Estimate before recruiting had started and I have never made any bones about the fact that we hoped that more people would join the Home Guard than did. It is almost as simple as that. I am very much more hopeful than hon. Gentlemen opposite are about the number that will join in the future. Perhaps we had better get off that topic and pass on to the next.
Vote 8 covers works, buildings and lands. The main item is an increase in works stores, which enabled us to complete certain works which had been started, like pipes, fittings, and so forth. They partly reflect some easement in the circumstances and are a very welcome addition to us because they have been very helpful to our building programme. They were a source of some difficulty in


the past. Subhead E, covering rent of buildings, shows an increase which is largely due to the increase in married quarter hirings. It is also partly due to homeless families returning from overseas. During the cold war it is an actuality which often arises.
Vote 9 consists of four minor items the major one of which is for postage, mail. etc. It reflects the added use of the Forces' mail concessions which have been brought in, and is partly because of the increased numbers overseas. More people know about the concessions and have availed themselves of them. That traffic has been brisker during this year than was anticipated.
Subhead E is largely due to payments we have made to civilian doctors for certain work. It does reflect a matter about which I, and probably the right hon. Gentleman as well, have felt anxious, namely, the supply of Regular doctors for the Army. In some cases we have had to ask for the help of civilian doctors, especially surgeons and specialists, and of course we have had to pay for it.
I am aware that there will be many items of this Supplementary Estimate in which hon. Members are particularly interested and points which they will want answered. We shall do our best to deal with those points as they arise. As I said at the beginning, it is a matter of regret to me to have to ask for a Supplementary Estimate, but I feel that hon. Members will appreciate that the majority of this extra money for which we are asking is due to forces outside our control. Any additions we have had have been strongly outlined and reflected because we have attempted to reduce our Estimates for last year, and indeed this year, to the lowest possible point compatible with preparedness and with fighting efficiency.

Mr. Wigg: I am sure that the Minister need not have been diffident about coming and asking for this Supplementary Estimate if he was confident that he could convince the Committee that the money granted under the original Estimate had been well spent. I am afraid, however, that he will find himself in some difficulty in convincing the Committee of that.
Before one considers a Supplementary Estimate in detail, the first step is to look at the original Estimate from which it arises. I know that we cannot delve too deeply into policy, but we were told last March, when we were passing the Army Estimate, that the Government had come to office to clear up the mess left by the Socialists. We were told that from now on everything in the Army would be all right; the delays, the shilly-shallyings and vacillations, which always inspire Service Ministers when they do not happen to be Members of the Conservative Party, were all things of the past and all the Government had to do was to introduce the new system of recruiting and to increase the rates of pay.
Well, the Minister did that. We had the new three years' scheme introduced in November, 1951. I do not want to take any credit away from the Minister although, of course, it had been on the stocks for some time. He introduced it and his is the credit and the responsibility. Then we had the increased rates of pay and, this weekend, we had the figures and the results of his policy. I must congratulate the Minister on his Public Relations Department, for they certainly turned on the sunshine. In every paper we saw statements about the highest returns for 20 years. Some people were almost lyrical and went back to the year 1905 for better figures.
Therefore, we take it that the Minister is claiming that his policy is successful and that from now on all recruiting problems for the Regular Army have been solved—

Mr. Head: indicated dissent.

Mr. Wigg: Well, the highest number of recruits since 1932 is the claim of his Department. I do not begrudge footing the bill, and I shall have no hesitation, if a Division is called, in going into the Lobby in support of the right hon. Gentleman. I have always done that. I do not begrudge money spent on the Service Departments if it. is properly spent, but, as far as I can remain in order. I want to look at the results. We have had 40,157 Regular enlistments and re-enlistments during the last year—40,000 young men went through the recruiting office.


Of course, the first thing to note is that that figure must be discounted by no less than 33⅓ per cent., because the National Service man is a gain only in his third year. 35,570 of the young men who joined in 1952 would be serving in the Army in any case on a two years' National Service engagement; and the number of men who would have been in civilian life but who, in fact, have re-enlisted is somewhere about 5,000. The total number of additional recruits to the strength of the Regular Army secured in the year 1952 as the result of the right hon. Gentleman's policy is. therefore, 5,000.
9.30 p.m.
I concede, of course, that a young man who comes in for three years is of much more value to the Army in the long run than a young man who comes in for two years. That extra year makes an enormous difference. It turns a man from a good junior N.C.O. into, probably, a first-class senior N.C.O. or, perhaps, warrant officer, and for an officer the gain is perhaps even greater for the addition of that year.
The figures I am quoting, and what I am inferring from them, are not quite all the story, because whilst there was a build-up of recruiting until September, from October onwards there has been quite a fall. It would be very wrong and quite irresponsible to be over-pessimistic about the December figures, which I think are always bad—Christmas is in young people's minds and if they think of joining the Regular Army they say, "Let us have Christmas at home with mother and we will join in the New Year"; but when the figures drop, as they have done, right through the fourth quarter of the year, one pauses to think that perhaps the recruits which the Minister got in the first nine months of the year have only been borrowed from the future.
My right hon. Friends who were responsible in the Service Department were wise to be a little cautious in pushing up the rates of pay, because by so doing they were putting all their eggs in one basket. Not only has the right hon. Gentleman borrowed, perhaps, from the future, in the sense that the numbers appear to be up whereas, in fact, they are not and are now beginning to fall. but there is another aspect.
The right hon. Gentleman and I have quarrelled in the past. It is perhaps one of the signs that I am getting old that I venerate the Services of Lord Haldane to the Army, for Lord Haldane was a man of wisdom and approached this problem from a wise angle. That is one of the advantages of having a civilian at the head of a Service Department. When faced with a similar problem, he was very cautious indeed before he began to play around with terms of service.
It is within the knowledge of every hon. and right hon. Gentleman who served in the Regular Army that, right up to 1939, we tried to solve these problems with some regard to the composition of the Army. For example, in the Brigade of Guards, where large numbers of young men were wanted in their early years, the terms of service were three with the Colours and nine with the Reserve. With the infantry, where men were wanted to serve overseas for a considerable period, many thousands in India, the terms of service were seven and five; with the Royal Artillery, six and six, and with the Royal Army Service Corps, eight and four. These terms of service, however, were varied to meet the needs of the Army as they varied between the different arms of the Service.
One of the things that has happened to these recruiting figures—I am surprised that the right hon. Gentleman did not tell the Committee; he was a little less than frank in not saying this-is that from May, 1952, no longer in the recruiting figures do we have men serving for five years with the Colours and seven years with the Reserve, or seven years with the Colours and five years with the Reserve. Now, we have two categories: those who are serving for three years, and those who want to take a long-service engagement far 22 years. As the right hon. Gentleman well knows, the men who are serving on the 22 years' engagement are, from the point of view of being able to leave the Army, in the same category as those who are serving for three years, because any one of them can go at the end of any three-year period of service.

Mr. Head: The hon. Member accused me of being less than frank to the Committee about the 22 years of service, but I must say I could not see that it had any direct consequence on the Supplementary Estimate.

Mr. Wigg: The right hon. Gentleman must not try to put me out of order. We are discussing the grant for the Regular Army, and I did not make the point exclusively on the 22 years' engagement. I was trying to make the point that as from May, 1952, recruiting figures did not include men with five and seven or seven and five years; that has all gone. What we now have is exclusively men with three years' service. I wanted to make the obvious point that it included men with 22 years although, for the purpose of my argument, they were on all fours with the men with three years' service.
I hope that the Under-Secretary will say a word about the three years' engagement scheme in relation to the Supplementary Estimate. If the recruiting figures continue to show a downward trend—and we shall know a little more about that by the time the Army Estimates come along —if we find that over a period of five months, say from October to the end of February, the figures, despite the lowering of terms of engagement to three years, have fallen off, then a most serious problem will have arisen. It will require very serious attention when we consider the Army Estimates. If this tendency for recruiting to fall off continues, then any hope of ever raising the Regular Army to the level which will enable us to rid ourselves of compulsory military service as a permanent part of our national life, will have gone for a very long time.
I am not going through the Votes point by point as did the right hon. Gentleman, but there are one or two points to which I should like to invite attention. I noticed that the right hon. Gentleman said nothing about the non-effective service. I am surprised about that because, not only does the increase carry the element of the cost in 1952, but also it carries the element in the increased cost published in the White Paper, Cmd. 8741.

The Under-Secretary of State for War (Mr. J. R. H. Hutchison): What is the date?

Mr. Wigg: January, 1953. It deals with the increased pensions for Forces Family Pensions. I was extremely disappointed to find that this White Paper is, once again, part of the policy of "jam tomorrow." I have said to the right hon. Gentleman, and I said to my right hon. Friends when they occupied his position, that the problem of recruiting for the

Regular Army is not only to be found in terms of increasing the rates of pay of those serving in the Army at present.
The best recruiting sergeant does not get paid, but is the father or mother of the young man whose family has given years of service in the ranks of the Regular Army. A discontented long service warrant officer or long service N.C.O. is a very bad recruiting sergeant. I also pointed out to my right hon. Friends, when discussing questions of the Regular Army, how akin they are to questions of recruiting men to the mines. I should have thought it in the interests of the Government to make quite certain that they give a square deal to the retired officer, the ex-warrant officer and ex-N.C.O. Then this White Paper comes along and once again what is being given is something for the man who is entering the Service for the first time or who is already serving. I will not trespass on your generosity, Sir Charles, as I shall be out of order if I say too much about that.
I wish to make a plea to the right hon. Gentleman to go to the Minister of Defence and urge him to do something to end the sense of grievance which exists—and rightly exists—in the minds of the retired officer who is now living on a pittance. That is one of the points which the right hon. Gentleman can do something about. It is not only a question of giving a few shillings or pounds or of merely making life a little easier for the ex-officer and his family living in modest retirement in Brighton, Bournemouth or wherever it might be. But even more important we should remove the burning sense of injustice which makes a parent turn to his son and say, "For goodness sake, go into the Civil Service, or be a doctor or a civil servant or a miner but do not make the mistake I made; so whatever you do, do not join the Army."
I know that the right hon. Gentleman has always taken the view that increasing the rates of pay would mean that recruiting would come right. I am sorry that that has not happened. It is in no sense of "I told you so" that one feels that Government policy has failed. If that fails the Government is hurt, but much more important is the fact that the Army is hurt and the country is hurt. We are spending a lot of money on the Armed Forces and it is important that we should


see that we get the best possible Army we can for our money. We do not get it unless we have a contented officer corps, and a corps of warrant officers and N.C.O.s who really put their backs into their job and are convinced that they are getting a square deal. My last point ties up with my first. I hope that the Minister will go to the Minister of Defence and the Prime Minister and plead that those who have served and have now left the Force should be turned into the enthusiastic recruiting sergeants without which we cannot get the kind of Army we want.

Mr. Hylton-Foster: It is difficult for a layman to relate Vote 4 to Vote 1. It is very important, if we are to get the best possible value for money, that we should see that when a soldier is substituted for a civilian, or vice versa, that is the cheapest way of proceeding. In the way in which the Estimates are necessarily presented, it is difficult to discover how much the increase is due to either branch of that process which is a balancing one.
I inquire about it because the feeling is abroad, I understand, that the National Service man, of whose activities everybody approves, is in a difficult position in this respect compared with a member of the civilian staff of the War Office. There must surely be some point of balance at which it is more expensive to put a National Service man on a job than to keep a civilian at it. I find it impossible to discover how much Vote 1 and Vote 4 do or do not indicate the economy of the process of "civilianisation," as I believe it is called. If we could have some guidance about that, I should be very grateful.

Mr. R. H. S. Crossman: I wish to ask the right hon. Gentleman one or two questions about one issue which he raised. He made it clear that a considerable cause of this increase asked for in the Supplementary Estimate is due to problems in the Middle East. Therefore I think we are justified in asking one or two questions, for instance, in regard to Subheads C. and D. of Vote 5 —"Movements." The right hon. Gentleman also mentioned the Middle East in reference to Vote 4 K. relating to the substitution of civilians for soldiers in R.A.O.C. establishments. I reckon that

on transport alone he seems to calculate that he needs some £3 million more, largely to do with movements in the Middle East. I was struck when he answered my hon. Friend about the number of men at any given time in the pipeline. I thought it was 25,000. He has told us now that at any one time, I think be said, there were no fewer than 30,000 men being transported to and fro.

9.45 p.m.

Mr. Head: I did say that I had not the figure. I gave an approximate figure which comes to somewhere about 30,000. I should be quite prepared to say 25,000 because I have not the actual figure, but it is somewhere around that amount.

Mr. Crossman: I find it interesting that the Secretary of State for War cannot say whether it is 25,000 men or 30,000 men who are at any given time in the pipeline. The transport of National Service men—

Mr. Head: If the hon. Gentleman is going to belabour me over the head for not knowing the exact figure without notice, I would say that if he or any other genius in the intellectual field were doing the job they, or any other man, could not do better. I say the figure is somewhere round 30,000 and I do not think that anyone, without notice, could answer further.

Mr. Crossman: This is a question which has been constantly asked of the Secretary of State for War on this subject of costs. I asked it of our own Secretary of State for War, and at that time the answer was 25,000. Now I am interested to hear, as I expected to hear, that, owing to movement to the Middle East in particular, the number has risen once again.
I suggest to the right hon. Gentleman that in one way this is a good thing. The other day I was in the Canal Zone. It is true that the morale of the National Service men out there is relatively high, because of the movements for which we are now paying such enormous sums. Any man who feels he is going to do only "18 months hard" in the Canal Zone, and is then going to get out, has a relatively high morale, and the morale of the National Service men there is undoubtedly much higher than that of the


Regular soldiers, precisely because of the increase in this Supplementary Estimate which is an increase for movements to and fro, very largely between the Middle East and this country.
The National Service man takes part in the movement. Of course, the one movement he likes is not the one out but the one back, and what struck me as having the most important effect on morale in the Middle East was the lack of movement for the Regular soldier. It is a fact that the National Service man, so to speak, can look forward after 18 months to getting home, whereas the Regular soldier may be moved from Malaya to Suez, having done two years in Malaya, and then have a three-year term in Suez. It creates a deep sense of depression among the ordinary soldiers who are concerned only to know when they can come home.
Then on the question whether the money has been well or badly used, there is the point whether money spent in the Middle East, would have been well spent on the provision of married quarters, but I think the right hon. Gentleman knows about that better than I do. I gather he visited them a few months ago and heard their complaints. It is the absence of married quarters which is the main problem in maintaining morale among the Regular soldiers out there.
There is the question, which is again part of the Supplementary Estimate, of putting an extra division and an extra parachute brigade into the Canal Zone. The problem of married quarters was made infinitely more acute at the beginning of last year. I took a good deal of trouble to inquire into the method of allocating the limited number of married quarters available and I gather that a very just method is instituted. However long a unit has been there does not matter. What matters is the length of time a soldier has served abroad and the number of points he individually has acquired; so that the division which came out last is not penalised as regards married quarters compared with those who have been there earlier.
By the way, those who have been there earlier were somewhat disconcerted to discover that they might be two or three years down the list as a result of the arrivals of reinforcements in the Canal

Zone. That means there is less and less chance of any hope of married quarters the more reinforcements we put in, which have to be paid for out of this Supplementary Estimate.
Of course, out of that absence of married quarters comes the other bitter complaint which I gather was also put to the right hon. Gentleman. I refer to the absence of a separation allowance. When a soldier is in a situation where he not only does not get married quarters but finds that he gets no sort of assistance to maintain his family at home, although he cannot have them out with him, then the contrast between other areas and the Middle East becomes even more striking. The soldier in Malaya not only has a soldier's job to do; he has also got a far higher chance of married quarters.
If one gets married quarters one does not complain about having no separation allowance, but to have no married quarters and then to find oneself penalised for not having them, and to have no leave whatever to Britain, Cairo or Alexandria and to have occasional possible leave to Cyprus is not satisfactory. There is no Supplementary Estimate here for home leave. There is no Supplementary Estimate for leave outside this vast perimeter in which the Regular soldier may have to live for two or three years.
I thought that, on the whole, it was amazing when they were up against it, as they were, to see how cheerful they were and how good was the morale despite the appalling depression of living behind that vast perimeter of barbed wire and having these new reinforcements piled in for no purpose to the average soldier except to overcrowd the area. This is now costing us vast sums of money because we are trying to pile into the area a garrison which it was never intended to have. What would the right hon. Gentleman say? I think that we might reasonably say that before the war the garrison of the Canal Zone was a division.

Mr. Head: A brigade.

Mr. Crossman: I thought so. What is the number of troops in the area where, before the war, we had one brigade. There are 80,000 men packed into that area—80,000 men packed into an area where the permanent accommodation is for one brigade. That produces conditions which are not amenable to high


morale and not amenable to a very pleasant life, especially when the soldier does not know what on earth he is supposed to do there. There is no real military service as there is in Malaya. The soldier does not know what on earth he is supposed to do but sit there and wait for the politicians to make up their minds what is to happen to him.
I wish to ask one or two other questions about the use of this large Supplementary Estimate which the right hon. Gentleman specifically told us was to be used for the Middle East. How far do we try to make use of local materials and local labour? I gathered that not only were civilians being brought in now but that we had to bring in 12,000 pioneers from Mauritius and East Africa. That is also a pretty expensive extra cost owing to the withdrawal of Egyptian labour.
How much Egyptian labour was withdrawn at the worst point last year? How much has come back? How much are we having to replace by civilians brought in from outside or by pioneers from East Africa and Mauritius? We need to know the answers to these questions. They are questions directly related to this Supplementary Estimate of which such a large portion is composed of extra amounts to be paid for the Suez base and its upkeep. I was told that virtually no local labour was employed now and that every piece of food and raw material has to be imported into this area of the desert, thereby enormously increasing the cost.
Perhaps the tragedy is that, despite this vast cost, the sense of dreary dilapidation is one of the most depressing features of the zone for the average soldier. One cannot blame the Treasury for saying, "We cannot bother about this; we are not going to bother about mending a pane of glass; we do not know how long you will be there," so we continue to spend millions and millions of pounds on maintaining this enormously inflated area in the Canal Zone and the base continues to fall into dilapidation.
If I might quote one instance to the right hon. Gentleman, I was talking to a very nice commanding officer of the Border Regiment who said, after showing me round the dilapidated huts and the broken windows, "We are not complaining, of course, but an Egyptian train passes within 50 yards, and we are supposed to be maintaining British prestige.

When the passengers look out of the windows and see the conditions in which we live I wonder if we really are maintaining British prestige at all. Perhaps you might mention that to the Secretary of State for War when you get back."
I have mentioned it to the Secretary of State for War, and I have fulfilled my promise. It did seem to me to be an extraordinary way of maintaining British prestige to pack 80,000 men into an area where one brigade was intended to be, to allow the cantonments to become gradually dilapidated, and to leave them there while we make up our minds.
So I ask the right hon. Gentleman whether he thinks this Supplementary Estimate is justifiable, and in what sense it is justifiable as regards the Middle East. What have we actually gained during the last 12 or 14 months by the extra two and a half divisions which we have packed into the Canal Zone? What extra demonstration of strength have we made? Have we made anybody believe that we are stronger than they would otherwise have thought by having this vast number of British soldiers in such conditions, with hardly any married quarters and no home leave or leave in the neighbourhood, doing nothing at all, while Egyptian trains pass by with the people in them watching them?
What exactly has this vast cost achieved in terms of British prestige? I should like the Secretary of State to answer, but perhaps he is not the person to answer. He has got to spend the money. Let me say to him that I was impressed by the candour of the soldiers, who talked of this vast space as completely useless without full Egyptian cooperation, which, it is quite clear, will not be received until we withdraw. Therefore, on what are we spending this Supplementary Estimate? What exactly is the point of it?
If the base has been rendered useless by the refusal of the Egyptians to cooperate, if a base in a hostile country is no base at all, because we have to use all the men supposed to be fighting the real enemy on guarding the base from the people who are supposed to be our friends; if that is all true, if the Government even admit, as they do, if the Secretary of State for War admits, as he does, that the Canal base is the biggest obstacle to Regular recruiting which


exists; if it is also true that the existence of the base is the major obstacle to any agreement with any of the people in the Middle East with a view to their taking part in self-defence against the Russians —if all this is true, how can the right hon. Gentleman come here and ask us to agree to spend another £3 million in keeping this array going in the Canal Zone, because that is what he is asking us to do?
The right hon. Gentleman says there is movement. He has 80,000 men there, and National Service men are moving to and fro all the time at a cost very largely in dollars. We have a base with 80,000 men which is preventing men recruiting to the Regular Army, because they know that there is a one-in-two chance of being sent to Suez, which is the most unpopular base, precisely because there is no soldier's life there at all, because there are politicians talking about prestige and trying to maintain it by keeping these men in dilapidated huts in vast numbers in a meaningless occupation. I wanted to ask the right hon. Gentleman one or two questions—

It being Ten o'Clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Resolutions to be reported Tomorrow; Committee also report Progress; to sit again Tomorrow.

LIGHT INDUSTRY, FIFE

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Kaberry.]

10.0 p.m.

Mr. William Hamilton: I wish to draw attention tonight to a problem which is of very special interest to the people of Fife and one which should be of very great interest to the Government and to the country as a whole. I refer to the need for the establishment of some light industry in particular in central Fife. I am glad to see that the Scottish Office is represented on the Government Front Bench tonight.
The case for a light industry in Fife has been put by the local authorities to successive Governments over the past few years with little or no effect. I believe, and I think the Under-Secretary

of State for Scotland would agree, that at the moment there is more need for the establishment of this light industry than there has ever been in the past, and I say that for one or two obvious reasons.
In the first place, we in the United Kingdom have a desperate need for more coal. If we do not get more coal there may be no national survival. In 1950, the National Coal Board produced what they called their "Plan for Coal." I shall not develop the figures given in that plan in any great detail because the Minister will, no doubt, have made himself familiar with them, but it is quite obvious from those figures that the Fife coalfield is going to expand enormously in the next 12 or 15 years.
In the period 1950–65, the Fife and Clackmannan coalfield is going to produce about 50 per cent. of the additional output of coal in Scotland, and so far as capital expenditure is concerned, £23 million out of £69 million for the whole of Scotland will be spent on this coalfield. That means that thousands of additional men will be required there.
It is quite true that a great deal of that development is going to take place in the East of the area, although there is going to be some development in the central area with which we are concerned tonight. It is clear from this plan that Fife has a tremendous industrial future, and that the industrial prosperity not only of Scotland, but of the United Kingdom, depends to a very large extent on the ambitious plan put forward for increasing coal production in this area.
That being the case, it is surely obvious to the Government that we must speed up this plan as fast as we can, and it seems to me that one of the first things we must do to that end is to attract miners into the area from the West of Scotland where the coalfields are, in the main, declining. Miners have, in fact, come from the West over the past few years, and I believe that the transfer system has met with quite a large measure of success. But there are increasing signs of dissatisfaction among these miners from the West because of the lack of social amenities and because there are no jobs, maybe for their young wives, in cases where they have no young family commitments, and no jobs for their daughters.
When I knew that this Adjournment debate was to take place I got in touch with the National Coal Board and I received a letter from the Divisional Labour Director which I should like to quote to the House. It is very illuminating and I do not think that the Divisional Labour Director would object to these quotations. He said:
In the course of transferring men, particularly from closures or partial closures in the Central West Area, the question was asked repeatedly by these men, whether or not there was suitable industry or prospects of employment either for their daughters or non-mining members of the family, and it was not an uncommon experience for potential transferees to turn down the coalmining employment offered on the grounds that no such suitable employment existed.
He added:
With light industry available offering employment to girls and other members of the family, in addition to being an additional inducement to transfer, it would also assist transferred families to more quickly settle in, and remove any desire to get back to their home area.
The whole letter is in that vein.
I can cite individual experiences in the Ballingry area and elsewhere where miners have complained that their daughters are travelling to and fro to the west every day because they cannot obtain jobs in central Fife. That clearly is a very serious problem. Unemployment among families in this area is very much higher than the average for Scotland as a whole.
I should like to draw the attention of the Minister to an answer to a Question which I asked on 28th October last year. I asked the Minister of Labour:
… the total number of women registered as wholly unemployed in Scotland in August, 1952; what is this figure expressed as a percentage of the total unemployed; and whether the percentage of women registered as wholly unemployed in central Fife is greater than that for the country as a whole."—[OFFICIAL REPORT, 28th October, 1952; Vol. 505, c. 1729.]
I found that over half of the wholly unemployed in central Fife are women, as compared with a third approximately for Scotland as a whole. Approximately 500 women and girls were wholly unemployed in the Dunfermline, Cowdenbeath and Inverkeithing exchange areas in December last year. In addition, there is a feeling in the area which has been expressed by the local authority that there is a considerable amount of concealed

unemployment among married women who would do a job of work if they had not to travel so far to jobs in light industry. There is in fact very little light industry apart from that in the textile firms in Dunfermline, Kinross and Leslie and the aircraft industry in Donibristle.
The population of the small village of Oakley in this area was a few hundreds in 1945. In 1960 the population of this village will be very nearly 4,000. Today three bus-loads of girls and women travel daily from Oakley to Alloa to work in the textile industry there. The distance is approximately 10 miles, which means that these girls have to rise very early in the morning and get back very late at night. They are faced with very heavy bills for bus fares by the end of the week. The whole thing is a waste of time and money and altogether most unsatisfactory.
In the Cowdenbeath-Lochgelly area it is estimated that 3,000 travel daily to Dunfermline, Kinross, Leslie and Donibristle, and that of this number approximately 1,000 are women.
It is quite clear that in the area as a whole there is a surplus of female labour. There is clearly a lack of balance in the industrial set-up of the area, and I think the Minister would agree that that is neither economically nor socially desirable. I always think that there is a weakness socially in an area which is too one-sided industrially, and particularly so if there is a slump. We cannot visualise a coal slump in the near future, but should there be a slump in the coal industry eventually this area will be one of the most hard hit areas in the United Kingdom.
The other reason which compels me to raise this question is the vital need to get additional miners into the area. I had intended to quote exclusively from the Cairncross Report. This Report was issued last April and it made quite clear that one of the great needs of the United Kingdom, and particularly of Scotland, was to get some new light industry into the developing coal mining areas, and in particular Fife. That Report emphasises the possible conflict between national and local interests.
Both the national and local interests demand that there should be some diversification of industry in this area. I


think the Labour Government was in some way at fault in not providing as much as it could for this diversification. Between 1945 and 1951 we find from the Cairncross Report that fewer new jobs were provided by new factories in Fife in proportion to the total insured population than in any other area in Scotland except the north.
The Cairncross Report goes on to say in paragraph 37 (c)—and I think this is the crux of the argument:
… it could be reasonable to suppose that both in South Fife and in Midlothian there was scope for more industrial development and that such development would help to attract miners and their families.
The Report also says in paragraph 13:
… perhaps there is nowhere a greater need of a new direction for Government policy on industrial location than in such places as Fife and Midlothian.
I would ask the Minister to take note of those words.
I want to ask the Minister one or two questions. Since that Report was issued, what have the Government been doing? What consultations have taken place between the Board of Trade, the Ministry of Labour, the Scottish Office and the local authorities? What action is intended to be taken? Quite clearly there are difficulties. I know the difficulties. I, with my hon. Friend the Member for Dunfermline Burghs (Mr. Clunie) have had consultations with the Ministry of Labour representatives and we are fully aware of the difficulties. But I would urge the Minister and the Government to treat this question as one of very great urgency. If we do not get the coal, our standard of living cannot rise as we all expect it to rise, and I would ask him to tell us what the Government intend to do.

10.15 p.m.

Mr. James Clunie: I am obliged for being called upon to make my contribution to the points raised by my hon. Friend the Member for Fife, West (Mr. Hamilton). In the time at my disposal I wish to make a direct appeal to the Minister, not so much for what I hope he can do, but rather to give the authorities in Fife some encouragement in dealing with this question. My general submission is that sufficient evidence and data have been presented to justify setting up light industries in Fife.
Fife is my native county, and it is a tradition of this House always to respond to the human side of our problems. The problem of light industries in Fife arises from the developments which are hound to take place within the next two or three decades and which will affect that portion of Fife within which my constituency falls. Arising from those arguments, the problem that is going to affect the central part of Fife is that a considerable number of girls and boys must travel fairly long distances in order to find work. As a member of a local authority before coming to this House, I found that this was of great concern to all local authorities within my constituency as well as to miners considering the future of the members of their families.
In this Adjournment debate we are endeavouring to put the problem before the Minister. First of all it is a human problem because it arises from the development which has taken place in the East and West of Fife, leaving the problem in central Fife to be dealt with by the provision of light industries. There are one or two points I wish to put before the Minister. We want these light industries to absorb the female labour in central Fife and to provide employment for what I might term the non-mining labour. We also want them to safeguard the future population within that area.
Finally. I would say that while the Minister might not he able to do a great deal for us about light industries, he might use his influence to bring about a joint meeting of all the authorities concerned with the presence of some representatives from the Scottish Department in order that the whole of the problem might be considered. I hope the Minister will give us as much assistance as he can, and I am certain if such a joint conference is held it will serve a useful purpose. I have endeavoured to say as much as I can in five minutes, and so give the Minister a reasonable time to reply.

10.20 p.m.

Mr. A, Woodburn: I wonder whether the Minister will permit me a minute or so as the third Member concerned with this problem, the Joint Under-Secretary of State for Scotland being the other Member involved at the other end of the constituency. The House has just listened to the maiden speech here of my hon. Friend


the Member for Dunfermline Burghs (Mr. Clunie), and I should like to congratulate him on the neatness and conciseness with which he put his points, especially in the short time at his disposal.
It seems to me that the work required to build houses for miners does not make the position very hopeful in the immediate future for the building of new factories, and if I am permitted I should like to make a constructive suggestion to the Board of Trade. The most important thing at the moment is to see that factories in the district are kept fully employed. There are big textile works at Alloa which absorb thousands, but such large-scale employment requires very big enterprises and the Government have no power to compel firms to go to these areas. Therefore, some inducement is required.
In the building of new factories, I would suggest that the Board of Trade make use of the Scottish Council of Industry with a view to getting small industries started in those areas where the miners are coming in by the thousand. We are very fortunate in Clackmannan because of the existence of a large number of small mills, but the Fife side depends very largely on Glen Rothes and some new developments are needed for that area. It is not likely that the Board of Trade are able to appreciate all the local niceties of this matter, and it would be much better if the Scottish Council of Industry could give some inducement, such as is given in the Development Areas, to get firms to establish themselves there. I know this is a big problem, and I cannot further develop it tonight.

Mr. Clunie: I should like to correct an impression created by my right hon. Friend the Member for East Stirling (Mr. Woodburn). I delivered my maiden speech in another part of this building.

10.22 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): I am grateful to the right hon. Gentleman the Member for East Stirling (Mr. Woodburn), the hon. Member for Fife, West (Mr. Hamilton) and the hon. Member for Dunfermline Burghs (Mr. Clunie) for the brevity of their remarks, although it has given me so little time to reply. I am also very grateful to the hon. Member for Fife,

West for courteously giving me some indication of the points he was going to raise. May I say at once a word about something with which he and the right hon. Gentleman dealt? They both mentioned, in effect, the Cairncross Report and the proposals which it contained.
The hon. Member for Fife, West quoted a pertinent passage that appears in paragraph 13 in which it is stated that there was a need for "a new direction for Government policy on industrial location." That places me in this difficulty. The Cairncross Committee, when describing Government action in paragraph 74 of the Report, say what they mean by a new direction for Government policy. It is quite clear that what they have in mind, as I think the right hon. Gentleman had in mind, was that Government should help in building factories under the Distribution of Industry Acts outside the development areas and they said that the considerations by which the Government should be guided should be industrial growth rather than unemployment. Whatever the merits or demerits of the proposal, it is clear that it would involve legislation. It is therefore not in order for me to deal with that aspect of the matter tonight.
If hon. and right hon. Gentlemen opposite want to see the difference between the Cairncross approach and that which has guided the Board of Trade, the Scottish Office and the Treasury, they need only compare paragraph 74 of the Report with paragraph 86 of the White Paper on the Distribution of Industry which the right hon. Gentleman's Government produced and which states the agreed criteria in this field.

Mr. Woodburn: I think that does not apply to the Scottish Council of Industry.

Mr. Strauss: As regards the help that the Government can give, what the hon. Gentleman has said is perfectly accurate. I have no wish to quarrel with a great deal of the facts and figures—without checking every one of them—which were given by the hon. Gentleman who opened this short debate. I think he would agree that male unemployment in the area is very low. He is right in thinking that in some parts of the area unemployment among women is relatively high. I think he will agree that the total unemployment is nowhere high in the coalfield. He is


certainly right in saying that a large number of people, particularly women, travel daily to work away from where they live.
It is stated that there is in this area a developing coalfield. Development plans which the Fife County Council will in due course submit to the Department of Health for Scotland will no doubt have these facts and all other relevant facts in mind. I have little doubt that we shall all be in agreement that some complementary industrial development will be needed to keep pace with this development in the coal industry.
In answer to one of the many very pertinent questions which the hon. Member put to the Government and to various Ministers last October, the President of the Board of Trade stated, he will remember, that we were trying to attract suitable light industries to Central Fife. We have, of course, no power of compulsion, but so far as industrial development certificates are concerned, none has been refused in this area and there is not the least likelihood of any being refused.

I am informed that since the war, new industrial developments completed or in prospect in Central Fife number 23. I know the hon. Member will forgive me for being brief.
There is also that important enterprise, the Glenrothes new town. The present population is 3,000. It is expected to increase to 9,000 in 1957. The work on water, drainage, shops and housing is proceeding according to plan. As Central Fife develops, it should afford excellent opportunities for light industries which will certainly be brought to the notice of prospective employers.
I am sorry that the time does not permit me to go into many other subjects, which were involved in the conclusion of the hon. Gentleman's speech, some of which would be out of order tonight. On the other matter, namely, the desire of Her Majesty's Government to attract, if they can, light industry to Central Fife, there is no difference between us.

Question put, and agreed to.

Adjourned accordingly at Twenty-nine Minutes past Ten o'Clock.